Business & Economics

Investors’ wealth worth Rs 12.5 lakh crore wiped out during Modi 2.0

BP World Bureau | Sep 10 2019 09:08:39 PM

Prime Minister Narendra Modi's government is celebrating its first 100 days in office. However, the investors don’t have much to celebrate.

The reign of the Modi 2.0 started on May 30, and since then the investors lost wealth worth Rs. 12.5 lakh crore.

 At Monday’s  closing, the market capitalisation or market value of companies listed on BSE stood Rs. 1,41,15,316.39 crore as against market capitalisation of Rs. 1,53,62,936.40 crore a day before PM Modi's government came to power.

The Sensex has plummeted 5.96 per cent or 2,357 points and the NSE Nifty 50 index has plunged 7.23 per cent or 858 points since May 30.

Analysts attribute the drop in equity markets to sluggish economic growth, along with outflow of foreign funds and weak corporate earnings.

Foreign investors have been net sellers in the Indian markets. The pressure to sell increased after Finance Minister Nirmala Sitharaman introduced the super-rich tax on foreign investors in the first Budget of second NDA government, which was introduced a month later.

Since the day Narendra Modi government’s second term began, foreign portfolio investors have sold shares worth Rs. 28,260.50 crore, according to the data compiled by National Securities Depository Limited (NSDL).

All sector gauges compiled by National Stock Exchange except the Nifty Information Technology index have yielded negative returns over the last 100 days, with Nifty PSU Bank index plummeting 26 per cent. Last month, the Narendra Modi government announced mega amalgamation of state-run banks in which number of government-owned banks will be slashed to 12.

Metal index plunged 20 per cent on the back of spike in trade war between US and China. Experts say despite the anti-dumping duty, China is selling cheap steel which is denting prospects of  the domestic metal companies.

Nifty Auto index has plummeted 13.48 per cent as auto industry faces its worst slowdown in two decades.