Investors lose Rs 2 lakh crore in a day

Investors’ stock market wealth plunged by a little over Rs 200,000 crore on Thursday after the Sensex recorded its sharpest single-day fall on fear of global economic slowdown. The total investor wealth, measured in terms of cumulative market value of all listed companies, plummeted by Rs 216,274 crore and stood at Rs 60,26,012 crore at the end of the day’s trade.

Of this, more than half or Rs 1,21,416 crore got eroded just from the 30-share BSE Sensex companies that include blue chips like Reliance Industries, Tata Motors, TCS and Bharti Airtel. Forty-six stocks saw market capitalisation erosion by more than Rs 1,000 crore each. Reliance Industries was the biggest loser, recorded m-cap erosion of Rs 16,192 crore in single day. The stock fell 6.2 per cent to Rs 786.45 on the BSE. TCS, Bharti Airtel, NTPC, Coal India and ITC  reported m-cap erosion between Rs 5,000-Rs 10,000 crore each.

The US Federal Reserve’s ‘Operation Twist’ did not have any pleasant surprise for the equity investors across the world, said Amit Chheda, equities head, Inventure Growth and Securities.

"In fact, it gave warning signals of significant downside risks to the US economy. Nonetheless, worries in the euro zone are larger at the moment," he noted.

Unless a comprehensive bail-out is acted upon, one could see high risks to European banks holding euro assets. "This can lead to a domino effect in other continents as well," he added.

A fear of weak corporate earnings for the quarter ended September and the Federal Reserve's assessment that the US economy faces significant downside risks saw carnage in the equity market. On Thursday, the BSE Sensex tumbled 704 points or four per cent, to settle at 16,361, its biggest single-day fall since July 6, 2009, when the index plunged 870 points.

Shares of metal companies were the worst hit.  Many of them plunged more than five per cent each after LMEX, a gauge of six metals traded on the London Metal Exchange (LME), closed at a 10-month low yesterday, on weak economic data in China. China is the world's largest consumer of aluminum and copper.

On Thursday, around 100 stocks, including BHEL, IFCI, JB Chemicals and Pharmaceutical, Gujarat NRE Coke and Indian Overseas Bank dropped to their 52-week lows. As many as 204 stocks froze the lower limit of circuit filter on the BSE.

The Realty index was the largest loser among sectoral indices. It fell almost six per cent on worries that higher interest rates could dent demand for residential and commercial properties. Among sectors, capital goods and power indices touched one-year lows on Thursday.