The Indian equity markets have eroded nearly a quarter of their value in dollar terms so far in 2018, as factors such as volatility in the global market, a rout in emerging market currencies and weak corporate earnings have dampened the investor sentiment. Benchmark indices slipped back into red zone on Thursday after a day’s breather, weighed down by telecom and financial shares.
While the Sensex ended the session at 33,690.09 points, down 343.87 points, the broader Nifty 50 closed at 10,124.90 points, down 99.85 points. Both the indices were down by 1% each and closed at their lowest levels in more than six months.
The Dow Jones Industrial Average fell 608 points, or 2.4%, on Wednesday to hit an over-three-month low as poor corporate earnings and a fall in information technology stocks dampened the sentiment. The index, which is down about half percent, has now erased all the gains in 2018.
With Thursday’s fall, the Indian stock market has lost about $557 billion in value since the beginning of the year. This fall is second only to the contraction in the Chinese market during this period. China lost $2.3 trillion of market value during the same period, although since its peak in June 2015, its market capitalisation had eroded 46% to $5.42 trillion.
The erosion of 23.3% in India’s market capitalisation in the current year is more than the entire market capitalisation of stock exchanges in the Netherlands, Thailand, Saudi Arabia, Singapore, Indonesia and South Africa, data compiled form Bloomberg showed. The Brent crude, which is hovering at $76.6 per barrel, had climbed to $86.3 per barrel in October to hit a near-four-year high. However, the global benchmark has lost more than $10 a barrel since its recent highs.
