27 December, New Delhi
Year 2015 will be marked as an year of extreme high and low for Indian equity markets. On one hand, Sensex barometer raced to its all time high of 30,024 points it scaled in March this year, while it also suffered worst-single day loss of nearly 16,624 points after China devalued its currency yuan in August.
However, due to low crude oil prices, Dalal street managed to absorb some of the major global shocks as markets worldwide got massacred following events like devaluation of Chinese currency, sovereign debt default crisis of Greece and overall slowdown of European economy.With barely three days to go of the year, 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 an yearly loss in 2011 when it fell 24 per cent.
The year started with foreign investors parking lot of cash in Indian markets riding on the prospect of big bang economic reforms by the ruling NDA government to spur up the economy. However, with crucial bills like Goods and Services Tax (GST) got stuck in the parliamentary proceedings and electoral reverses for BJP in Delhi and Bihar state elections turned the tables disappointing domestic as wells as foreign investors
It has been the heavy sell-off by foreign portfolio investors (FPIs), who have long regarded Indian markets as their favourite emerging market play, especially in the second half year. Subdued quarterly corporate earnings of big Indian companies also reflected the underlying weakness of the economy. This year also real estate sector also couldn’t found a solution to solve the jigsaw puzzle of debt trap it entered during era the sub prime crisis in 2008.
The government hand was tied up as key economic legislations were blocked in Upper House of Parliament by Congress where prinicipal opposition party enjoys majority.On the brighter side, 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.
In the mid of the year in September, ceiding to impassioned calls by the corporate India, The Reserve Bank of India slashed the repo rate by higher than expected 50 basis points to 6.75 per cent, the lowest the key interest rate has been in four years.For an industry desperate for a pick-up in credit growth the rate cut came as a much relief but banks, on their part, turned cautious after a rising tide of stressed and non-performing assets, pushing back investment by domestic industry. So, the desired affect of the move was more or less punctured by the lenders reluctance to lend with a free hand.
In fact, Finance Minister Arun Jaitley during Winter Session said that pick up in private investments has not gathered momentum so government has to increase the public investments to keep economy going.
The major losers this year included 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.