Investors lose $500 bn in 2011

No respite seen anytime soon.

A sharp downslide in the stock market has made the investors poorer by more than $500 billion since the beginning of 2011, and experts fear losses could mount further in the coming months.

Measured in terms of cumulative value of all listed shares in the country, the total investor wealth in the Indian stock market has dropped from close to Rs 73 lakh crore (about $1.69 trillion) at the start of 2011 to close to Rs 56.9 lakh crore (about $1.1 trillion) currently.

Only three weeks of trade is left this year and the continuing spate of bad news — both on domestic economy and the overseas cues — do not spell anything good for the markets in the coming months, some experts fear.

From a 52-week high of 20,664.8 points on January 3, the first day of trading in 2011, the market benchmark Sensex has fallen to 16,213.46 points now and some analysts foresee the index falling to as low as 14,500 in the next six months.

This would mean a fall of more than 12 months and could erase more than $100 billion (more than Rs six lakh crore) further from the investors’ wealth.

Global financial services major Bank of America-Merrill Lynch has named India as the worst-performing market this year with a fall of about one-third in the US dollar terms.

“... We continue to expect a tough market over the next six months and expect a correction of the Sensex to 14,500 as growth concerns take center-stage,” it added.

As a major drag for the market, it listed out concerns like a slowdown in the economic growth, due to slowing global economy, high interest rates and slowing investment demand.

The report, however, talked about a year-end rally in the remaining part of December, as the last month of the year has traditionally been a strong period for the market.

On a good note, BofA-Merrill Lynch said, 2012 as a whole could bring some good news for the market and the Sensex could move to the 19,000 level by the end of the year.