100 days of Modi 2.0: Investors lose Rs 12 lakh crore in mcap; 22 stocks in BSE500 plunge over 50%

The first 100 days of the Modi government 2.0 appear lacklustre on the parameters of economic growth and the performance of the equity market.

While the country's GDP growth fell to over 6-year low of 5 percent in the June quarter, equity benchmarks Nifty and Sensex have plunged 7.10 percent and 5.81 percent, respectively, since May 24.

Data shows that investors lost nearly Rs 12 lakh crore in the BSE-listed firms and as many as 22 stocks among the BSE500 pack plunged over 50 percent, from May 24 till date.

Stocks such as HSIL, Coffee Day Enterprises, Jet Airways, Reliance Capital and Indiabulls Integrated Services have lost over 70 percent of their market value during the said period.

A gamut of domestic as well as global factors was at play to bring the market down during the period.
The US-China trade war, the chaos around Brexit and geopolitical tension were the top global headwinds. At the domestic front, the budget proposal of tax surcharge on super-rich, a slump in auto sales and the liquidity crunch in the financial market triggered a fresh wave of outflow of foreign fund from the equity market.

The poor health of banks and NBFCs, disappointing quarterly earnings of the India Inc and an almost stagnant agri sector made the situation worse.
Foreign portfolio investors (FPIs) took off nearly 29,000 crore from the Indian equity market during July and August 2019.

The selling was widespread. Data from Ace Equity shows barring the IT sector, which rose about 7 percent, all sectoral indices experienced the heat of selloff following the return of the NDA government.

India does not have a 10% GDP growth rate model right now: Rakesh jhunjhunwala.

Rakesh Jhunjhunwala is not bearish on the market at current levels and sees 10,750-11,000 levels on the Nifty to act as a bottom for market.

The big bull of D-Street, Rakesh Jhunjhunwala, in an exclusive interview with CNBC-TV18 expressed his concerns about the state of the market, and slowdown seen in the economy.

Rakesh Jhunjhunwala highlighted that NBFC crisis, elections as well as fiscal situations have led to a short-term slowdown in the economy.

"Every bank is shy to lend corporates. This reluctance can be overcome by capitalizing banks & flushing the system with liquidity," said Jhunjhunwala.

However, he is optimistic that the economy and the market will rebound, but can’t put a timeline on it.

“India is not in the ICU but we need a sense of urgency w.r.t dealing with NBFCs, and price being paid for correctness in business models is not too high,” said Jhunjhunwala.

“Constant restructuring of PSU entities has also led to pain in the economy. I don’t feel that India has a 10 percent GDP growth rate model as of now,” he added. And, it would be difficult to see double-digit growth in the next 2-3 years, added Jhunjhunwala.He is not bearish on the market at current levels and sees 10,750-11,000 levels on the Nifty to act as a bottom for markets.

If the Indian economy has to grow beyond the 6-7 percent mark, it would require stimulus from the government, and at the same time subsidy should be stopped to public sector enterprises.

“Govt needs to act fast on the economy. The economy needs govt stimulus to grow beyond 6.5 percent. Govt should stop subsidising Air India, BSNL & MTNL,” said Jhunjhunwala.

He further added that the Govt may not want to do things in a hurry, but has no doubt that this government will do whatever it takes to push the economy to a $5 trillion mark.