In less than two months, Rs 50 lakh crore was wiped out from the stock market. The main reason for this is the recovery of profits from the stock market by foreign investors. Who have withdrawn more than Rs 1 lakh crore so far in the months of October and November. The stock market has fallen by more than 9 thousand points from its life time high. On the other hand, a similar situation is being seen with Nifty. Now the biggest question is how are the coming 50 days going to be? Will the stock market be able to recover this loss in the next 50 days? Will Sensex and Nifty be able to rise above their life time high and set a new record in the next 50 days?
These questions are also important because there has been a decline in the pace with which foreign investors were withdrawing money from the stock market. On the other hand, Donald Trump, who achieved a historic victory in the US elections, may not have taken the oath of office as President, but he has started giving his economic and political indicators. Due to which the conditions of the global stock market will completely change. America faces problems due to tariffs on China, dollar strength and mutual trade between India and China. All these things will impact the Indian stock market in the coming days. Let us try to understand why the next 50 days are important for the Indian stock market?
Loss of Rs 50 lakh crore in 50 days
The devastation of the stock market can be gauged from the fact that Sensex and Nifty have seen a big decline during this period. Due to which investors have lost Rs 50 lakh crore. On September 27, when Sensex was at its peak i.e. life time high, the market cap of BSE was Rs 4,77,93,022.68 crore. Whereas on November 18, Sensex has reached below 77 thousand points and the market cap of BSE is close to Rs 4.27 lakh crore. This means that during this period, Rs 50 lakh crore has been lost from the market cap of BSE. This is the loss of stock market investors.
How much did Sensex and Nifty fall?
A decline is being seen in the stock market on Monday also. While Sensex has fallen by more than 600 points and Nifty has fallen by more than 180 points. If we talk about the last 50 days, a big decline has been seen in the stock market. On September 27, the Sensex had reached a life time high of 85,978.25 points. Since then, Sensex has seen a decline of 9,013.19 points i.e. 10.50 percent. If we talk about Nifty, it had reached life time high on September 27 with 26,277.35 points. In such a situation, a decline of 2,926.95 points i.e. 11.13 percent has been seen during this period. Now the biggest question is whether there will be a rise in the stock market in the coming days or not?
Destruction caused by foreign investors
The main reason for this devastation in the stock market is the exodus of foreign investors from the stock market. Who have withdrawn more than Rs 1.16 lakh crore in about 50 days. A record profit of Rs 94,017 crore was realized in the month of October. In the month of November, Rs 22,420 crore has been withdrawn so far. This is also a record in itself. Never before have foreign investors withdrawn such a huge amount from the stock market in such a short time. Experts believe that the valuation of India’s stock market had become much higher than other emerging stock markets of the world. Because of which foreign investors are now making clear profits. However, last week the pace of profit booking by foreign investors was much slower than the previous weeks. Which was only Rs 2,500 crore, whereas in the first week a withdrawal of Rs 20 thousand crore was seen from foreign investors. This slow pace can be considered a better sign for the Indian stock market.
How can the stock market be in the next 50 days?
- Vipul Bhowar of Waterfield Advisors said in a media report that RBI and SEBI have prepared a new framework for reclassifying foreign FPI as FDI. Due to which a positive impact can be seen on foreign flows into India. The new framework will be more flexible for foreign investors and will remove the hurdles in their entry.
- With the new rules, FPIs can hold larger stake. This creates opportunities to increase foreign investment in Indian companies without the need for immediate disinvestment, especially in mid-cap companies, and helps in attracting long-term capital. Whose positive effect can be seen in the stock market.
- On the other hand, the policies of Trump Admin are also going to be very important. America’s bitterness with China is likely to increase. In such a situation, India will be an important country in South Asia for America. On the other hand, along with promoting foreign investment, the closeness of Trump and Narendra Modi will also keep an eye on how much and how the trade is between China and India.
- On the other hand, experts say that if profit booking by foreign investors stops, even if the investment is negligible, there is still a possibility of a rise in the stock market due to investment by domestic investors. Dr. Vikas Gupta of Omniscience Capital said in the media report that apart from this, as clarity begins to emerge in the policies of the Trump administration, FII flows are likely to return to developed and emerging markets.
- For the first time since 2020, India Inc’s second quarter earnings season has been bad. Due to which there is a decline in the shares of companies. Experts believe that the figures for the third quarter will be better and the fourth quarter will be strong. Because of which there is every possibility of a rise in the stock market.
