Market wealth down by over $500-bn

New Delhi: With the share prices hitting a new bottom on every bad news about the global economic health and various domestic matters, more than USD 500 billion have been wiped off the stock market wealth so far in 2011.

While the losses are being incurred by investors across the board, the situation is even worse for overseas investors – who have lost an average of Rs 35 on an investment of Rs 100 made at the beginning of this year, as against a loss of Rs 24 on a similar investment by domestic investors.

It is the double-whammy of a falling rupee and the plummeting share prices has made the losses much more severe for the foreign investors in India, the data suggests.

Together, all classes of investors have seen the value of their shareholdings in Indian companies drown by about USD 555 billion since the beginning of 2011.

The total investor wealth, measured in terms of the value of all listed shares on the leading bourse BSE (Bombay Stock Exchange), has plummeted by about 35 per cent from close to USD 1.6 trillion at the start of 2011 to just over USD one trillion or at USD 1.05 trillion as of now.

In rupee terms, the loss has been about 24 per cent or close to Rs 17 lakh crore — from close to Rs 73 lakh crore at the beginning of 2011 to about Rs 55.7 lakh crore currently.

Measured in terms of the movement in the stock market benchmark Sensex, the 30-share sensitive index of the BSE, the market has fallen by about 24 per cent so far in 2011.

However, the losses have been over 10 percentage points higher for foreign investors, as the BSE`s Dollex index, which tracks the movement in the benchmark Sensex in the US dollar terms, has fallen by over 35 per cent in the same period.

On January 3, the first trading day of this year, both the Sensex and Dollex had scaled their one-year high levels of 20664.8 points and 3794.25 points, respectively.

Currently, the Sensex and Dollex indices stand at 15695.43 points and 2462.91 points, respectively.

Experts said that the wide difference between the Sensex and Dollex movements is largely due to a sharp fall of over 17 per cent in the rupee valuation against the US dollar since the beginning of this year.

The rupee value has plummeted to a record low level below the Rs 52-level against the US dollar, from close to Rs 44 level at the start of 2011.

In the process, the foreign investors (FIIs) have turned net sellers in the stocks for 2011, with a net outflow of over Rs 1,650 crore (about USD 167 million) so far this year.

In comparison, the FIIs had made net inflow of over Rs 1,33,000 crore (about USD 30 billion) in equities during 2010.

The factors being listed out for the market plunge include debt crisis-driven economic slowdown in the US and Europe, as also domestic factors like surging inflation, rising interest rates and slowing pace of economic reforms.