Mumbai: A series of bad news has caused an erosion of Rs 13.7 lakh crore from the Indian capital markets in less than a month since the Union Budget was presented on July 5, leaving the markets battered and bruised.
In the past 19 sessions, the benchmark Sensex has lost over 3,400 points. Banking on high hopes from the new government, the Sensex had surpassed the 40,000-mark ahead of the Budget. But since then it has been mostly downhill. The markets have now reversed all the gains made in 2019. In fact, all the gains in the first six months of 2019 have been reversed in one single month of July, largely on the account of one of the highest monthly outflows of foreign funds.
The retail investors are the worst hit. S&P mid-caps have shed nearly 1,180 points since July 5 to 1,3546 points on Friday.
“There has been clear overdose of challenging news flow for the past one month,” said Jagannadham Thunuguntla of Centrum Broking.
If the local concerns were not enough, the US-China trade talks took a turn for the worse. US President Donald Trump sent shock waves across the global markets after he announced that the US will put an additional tariff of 10 per cent on the remaining $300 billion of goods and products coming from China.
The global markets had already taken a hit after the US Federal Reserve indicated that the first rate cut since the 2008 financial crises was not the beginning of a rate cut cycle.
On the home front, the controversial super-rich tax caused immense panic among the foreign investors. Net Foreign Portfolio Investment (FPI) outflow crossed a massive Rs 16,000 crore. (IANS)