Press Trust of India
Mumbai, Dec 26: After a roller-coaster ride, Dalal Street is headed for its worst performance in four years in 2015 — when foreign investors pushed the benchmark Sensex to a life-time high before puncturing the rally by pulling out billions of dollars from their ‘favourite’ market. With just four days of trading to go, the Sensex has lost 1,660 points or over six per cent in 2015, after gaining nearly 30 per cent in the previous year. The index had last registered a yearly loss in 2011 when it fell 24 per cent.
The index, which currently stands at 25838.71 points, is also sharply down from its life-time peak of 30,024 points it scaled in March this year on a rate-cut boost from RBI. On the other hand, the year also marked the worst single-day loss on August 24 when the Sensex took a sharp plunge of 1,624.51 points (5.94 per cent) following a steep devaluation of Chinese currency yuan in the beginning of August.
However, listing of new companies in the stock market helped the total investor wealth, measured in terms of market capitalisation of all listed shares, retain its level close Rs 100 lakh crore — albeit a shade below the mark. There has not been much change on this front from the 2014-end level of Rs 98.4 lakh crore, although it mostly remained above Rs 100 lakh crore mark till July in 2015. The NSE’s Nifty is also down nearly 6 per cent for 2015. The major losers this year include metal, banking, realty and PSU stocks. The BSE metal index is down more than 32 per cent, realty about 15 per cent, banks by over 10 per cent and the PSUs by over 18 per cent. However, healthcare and consumer durables have done better with smart gains in their indices.
It has been the heavy sell-off by foreign portfolio investors (FPIs), who have long regarded Indian markets as their favourite emerging market play that turned the tables for the Indian stock markets in the second half of the year. On top of it, the FPIs have been net sellers in the secondary market and it is the investment made in IPOs that has helped the overall inflows remain in positive territory. However, similar was the case for most other markets as global headwinds including from China had their impact almost everywhere. In terms of positives, it was RBI which kept on providing some boost with its policy actions and the year’s biggest single-day rally — gain of 728.73 points (2.66 per cent) in Sensex to 28,075.55 on January 15 — also followed a surprise rate cut by the central bank.
The market was all pumped up in the first quarter and vaulted past the 30,000-psychological mark on March 5, 2015, on the back of heavy foreign inflows. During this period, FPIs, as a mark of their determination, poured in some Rs 79,000 crore (nearly $12.5 billion) in equity and debt. While positive momentum continued somewhat till the second quarter, it turned lacklustre thereafter with FPIs resorting to huge sell-off especially in equity markets. The political setback to the BJP in Delhi and Bihar assembly polls and delay in key reforms including GST, coupled with global headwinds especially in China and uncertainty about an interest rate hike in the US, also kept the markets on the edge.