Investors lose Rs 3.5 trn m-cap as Sensex tumbles over 2% on Budget day

Total investor wealth, measured in terms of the cumulative market value of all listed stocks on BSE, fell by Rs 3.5 trillion today to Rs 153 trillion, the exchange data shows.

Investors lost a whopping Rs 3.5 trillion in the stock markets on Saturday after the benchmark indices fell more than 2 per cent after the Union Budget for 2020-21 disappointed Dalal Street.

Total investor wealth, measured in terms of the cumulative market value of all listed stocks on the BSE, fell by Rs 3.5 trillion today to Rs 153 trillion, the exchange data shows. The market capitalization (market-cap) stood at Rs 156.5 trillion, on Friday. In the past three days, investors have lost Rs 6.21 trillion market cap.

The S&P BSE Sensex closed at 39,735, down 2.4 per cent or 988 points today. From a level of 41,199 on Wednesday, January 29, 2020, it has tanked 3.6 per cent in the past three trading days. 

Housing Development Finance Corporation (HDFC) and ITC lost market-cap of Rs 24,492 crore and Rs 20,158 crore, respectively. Reliance Industries, HDFC Bank, State Bank of India (SBI), ICICI Bank and Larsen & Toubro, on the other hand, saw their market-cap decling between Rs 11,490 crore and Rs 18,000 crore.

“The markets have reacted negatively to the Budget, mainly due to some disappointments on account of non-abolition of long term capital gain (LTCG) tax, confusion about the impact of dividend distribution tax (DDT) removal and taxing dividends in the hands of recipients,” said Dhiraj Relli, MD & CEO, HDFC Securities.

Also the alternative provided to individuals for lower rate of tax, provided they do not claim exemptions/deductions, did not seem too attractive. The alternative tax system discourages investments which market participants do not seem to be comfortable with, he added.

Only five of the 30 constituents on the Sensex settled in the green. Tata Consultancy Services (TCS), which was the top giner on the index today, added Rs 32,195 crore in its market-cap. Hindustan Unilever, Nestle India, Infosys and Tech Mahindra also added market-cap in the range of Rs 1,000 crore to Rs 8,500 crore. The rationalization of DDT is the cheerful factor for some high dividend-paying companies like IT companies.