Market Capitalisation Erodes By Rs 97000 Cr, Post-Pokharan

The euphoria over a BJP-led government got punctured with the Pokharan blast and the Union budget for 1998-99. Following this, the BSE Sensex crashed by 869 points. The investor's loss was so much that market capitalisation worth Rs 97,023 crore was wiped out.

On a weakest-ever market sentiment, selling pressure mounted on speculative as well as fundamentally sound stocks. About 89.2 per cent active stocks registered a decline with scores of pivotal and B1 stocks losing further ground. A group stocks registered only four gains and 146 declines, B1 sink with 113 gainers and 518 losers, while B2 had 92 gainers and 200 losers.

 

The market, measured by the BSE Sensex, fell by 21.6 per cent to 3152.96, while the market capitalistion declined by 18.4 per cent to Rs 4,30,062 crore. A severe fall in market capitalisation was registered in the A group stocks. The market capitalisation of this sector declined by 22.3 per cent to Rs 2,45,974 crore from Rs 3,16,437 crore before the Pokharan blast. B1 stocks lost 14.5 per cent of market capitalisation to Rs 1,48,198 crore, while B2 stocks registered a fall of 4.1 per cent.

The public sector unit stocks (PSUs), which seldom participate in the market rally, seems to have faced the market wrath. Fifteen top ranking PSUs, led by ONGC, reported a decline of Rs 27,042 crore in market capitalisation. The corporation registered the sharpest fall at Rs 9,953 crore, followed by MTNL at Rs 4,725 crore and BHEL at Rs 3,337 crore.

ITC, Reliance Industries and SBI are other major victims of the current market sentiment. The tobacco major, which declined by 23 per cent since May 8, reported a lose of Rs 4,423 crore in market capitalisation. SBI also came under heavy selling pressure. With market price falling by 30 per cent, the bank lost Rs 4,415 crore worth market capitalisation. Reliance, too, dipped by 23.1 per cent, shedding Rs 4,145 crore of market capitalisation.

If the price movement between the pre-blast level of May 8 and post-budget level of May 29 is compared, it is seen that A group stocks were the prime losers. During the period, only 28 A group stocks gained with 122 losing further ground. BPL was up by 50 per cent and Videocon gaining 42.23 per cent rallied up on Harshad sentiment, while IDBI was down by 23.8 per cent, Bank of Baroda low by 23.5 per cent and NOCIL down by 23 per cent, faced a major wrath.

During the period, the 30 sensex stocks declined by 335.8 points or 8.3 per cent, while market capitalistion of these stocks declined by four per cent to Rs 2,66,452 crore. A group stocks suffered a severe set back with a decline of 6.6 per cent in market capitalisation.

Even the price comparison between the pre-budget level (May 29) and post-budget level (June 15, 1998), the fall was in market price was all-round. During the period, A group registered no gainers.

Only a few of the 296 B2 stocks and 40 out of the 631 B1 stocks gained ground. While ths sensex declined by 533.43 points to 3152.96, the market capitalisation declined by 14.5 per cent to Rs 1,60,543 crore. A group registered a severe jolt with a dip of 16.8 per cent in market capitalisation.