15 Lakh crore market cap wiped out in 1 month.

The massive selloff in the stock market has eroded Rs 15,00,000 crore worth of investor wealth in last 30 days.



While broader market has been in pain for the entire first half of Calendar 2019, a selling spree by foreign investors post the July 5 Budget and earnings disappointment have ensured that largecaps no longer remain safe bets.

Recently, foreign brokerage UBS cut Maruti Suzuki India rating to ‘sell’ from ‘buy’ while CLSA cut M&M’s rating to ‘sell’. Tata Motors, UPL, IOCL, Axis Bank, Vedanta and Tech Mahindra are a few companies, which have missed profit estimates, triggering cut in price targets for these stocks.



A few of the large cap firms such as YES Bank and Tata Motors have even seen their ratings cut by rating agencies. Analysts said earnings have failed to cheer the market so far. With the government’s income-tax surcharge proposed on high income groups, falling rupee that hit 70-mark on Monday and global trade tensions at new high, India has started becoming an unattractive destination for FPIs. This has led to an outflow of Rs 15,000-odd crore of FPI money since the Budget. FPIs are known for their investment in Sensex and Nifty stocks.

Shares of Indiabulls Housing have plunged 36 per cent in last one month. Tata Group stocks Tata Motors (22.67 per cent), Titan (19 per cent) and Tata Steel (18 per cent) have plunged up to 23 per cent. SBI has tanked 20 per cent. Coal India, JSW Steel, ONGC, and Vedanta have fallen between 14-18 per cent.



“There were no big bang reforms, or any major stimulus, in the Union Budget. On the contrary, an increase in income-tax surcharge and the proposal to raise public shareholding dampened investor sentiment and led to a sharp correction post Budget."

Consensus Nifty EPS estimates have been seeing repeated cuts, with the momentum of downgrades spreading across stocks. Earnings of Nifty companies so far (two-thirds of the index weight) indicated Q1FY20 EPS growth of only 5 per cent YoY, Emkay Global said in a note.

“This contrasts with a steep 20-30 per cent growth rate built into consensus expectations for FY20/FY21. Despite the recent correction, we see Nifty valuations (17.5 times one-year forward) not factoring in further earnings risks,” the brokerage said.

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