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Last Updated : Jul 22, 2019 05:13 PM IST | Source: Moneycontrol.com

Investors wealth erodes by Rs 6 lakh cr since Budget as FIIs continue selling spree

Apart from relentless selling by FIIs, muted results from India Inc for June quarter, trade war, geopolitical concerns and slowdown fears have affected investments.

Kshitij Anand @kshanand

Investors have lost over Rs 6 lakh crore since the Union Budget as foreign investors pressed the ‘sell’ button on equities following the announcement of super rich tax.

The average market capitalisation of BSE-listed companies dived from Rs 151.35 lakh crore recorded on July 5 to Rs 145.34 lakh crore as on July 19, which translates into a fall of Rs 6.01 lakh crore.

“The selling in the equity markets intensified post the Union Budget mainly on account of levying a humongous tax on FPIs, HNIs, and UHNIs.  Levying of additional tax and showing no plans of revoking those additional taxes have resulted in FII selling,” Foram Parekh of Indiabulls Ventures Ltd told Moneycontrol.

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“If no actions are taken by the government sooner, then we will continue to witness brutal selling in the markets supported by no signs of consumption pickup at the ground level, which is dampening the corporate earnings,” she said.

According to the latest data available with depositories, a net sum of Rs 7,712.12 crore has been pulled out from equities during July 1-19. However, foreign investors pumped in Rs 9,371.12 crore in the debt segment during the period.

This has translated into a net investment of around Rs 1,659 crore in July so far into the capital markets (both equity and debt).

Apart from relentless selling by FIIs, muted results from India Inc for June quarter, trade war, geopolitical concerns and slowdown fears have affected investments.

Persistent selling by foreign investors has pulled Nifty below 11,500-11,400 and the index is now heading towards 200-day moving average placed at 11,127. Experts feel that the volatility is likely to continue for some more time but investors should use the drop to buy into quality stocks.

“The slowdown issues could drag the markets in the medium term, it offers an opportunity for long term investors who have an investment horizon of more than three years,” Arun Thukral, MD & CEO, Axis Securities told Moneycontrol.

“One should not miss out of a larger picture amidst the current bleak environment that looks to be cyclical and transient in nature. Amidst this risk aversion, a long term investor should keep hunting for bargains in quality companies with enduring moats and long term growth potential,” he said.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on Jul 22, 2019 12:09 pm
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