UPA win adds Rs 2.55 lakh crore to investor wealth in a day

Written by Pradip Kumar Dey | Mumbai, Jul 23 | Updated: Jul 24 2008, 05:59am hrs
The UPA win in the Parliament has added over Rs 2.55 lakh crore in investors' wealth in a single day after shares surged across the board on Wednesday amid celebration in the bourses on the governments second life. Investors have not seen market capitalisation gains of such magnitude in recent times.

Sectors like banking, electronics, NBFCs, construction, electric equipment, fertilizers, steel, telecommunications, engineering and diversified industries witnessed a large increase in market capitalisation during the day. While the market cap of the banking sector rose by a hefty Rs 34,967 crore, construction and steel stocks gained Rs17,799 crore and Rs 14,870 crore, respectively. Nimesh Shah, MD, Enam, said: Indian market was in oversold territory and this is because of the government going to the trust vote. So there has been renewed buying.DR Dogra, deputy MD, CARE, a ratings firm said, The markets cheered the victory of the UPA government which has erased the political uncertainty and might pave the way for speedier reforms. UPA won a vote of confidence in the Parliament by garnering 275 votes against 256 votes of the Opposition. This will help the government to concentrate on issues like pension reforms, reforms in the insurance & banking sector, pushing manufacturing growth and ensuring the GDP growth rate. Also, crude has come down to nearly $126 a barrel which will cool down inflation, reduce fiscal deficit and augur well for rupee appreciation. Cues from global markets have also been positive, he added. The Sensex rose 838.08 points from the previous days close of 14104.20. It finally reached a level of 14942.28 at close. The increase was the fourth largest in a single day in the index during 2008.

The aggregate market capitalisation (M-cap) of the Bombay Stock Exchange (BSE) shares increased by Rs 2.55 lakh crore (5.63%) in a day, i.e. from a level of Rs 45.27 lakh crore on Tuesday (July 22 ) to Rs 47.82 lakh crore on Wednesday (July 23). The market capitalisation of the BSE A group also rose 6.06% (Rs 2.24 lakh crore) in a day from Rs 37.03 lakh crore to Rs 39.28 lakh crore during the same period. Reliance Industries, the numero uno in terms of market cap, gained Rs 16,168 crore during the day. ONGC also gained Rs 6,085 crore to Rs 2.12 lakh crore on July 23, from Rs 2.06 lakh crore on July 22. Significant increase in M-cap on July 23 was seen in bank stocks.

The BSE Bankex increased by 662.52 points (10%) to 7291.50 on Wednesday from the level of 6628.98 on Tuesday.

Among bank stocks, YES Bank added Rs 595 crore to its M-cap on Wednesday, an increase of 16.7% to Rs 4145 crore, against its Tuesday's level at Rs 3550 crore. Federal Bank showed an increase of 12.5% in its M-cap.