Investors lose `5 lakh-cr of wealth in 4 trading sessions

The slump has wiped out around `5 lakh crore of investors’ wealth in the last four trading sessions as simmering tensions between North Korea and the US led to a severe risk aversion in the global markets.

The small- and mid-cap stocks were the losers during the current round of selling as stretched valuations and lower than expected corporate earnings growth disappointed investors.

The BSE small-cap and midcap index tanked 3.60 per cent and 2.60 per cent respectively as stocks in these counters plunged more than 5-10 per cent on heavy selling and lack of buying at lower levels.

While the 30-share BSE Sensex dropped 2.45 per cent this week, the BSE small-cap and mid-cap index plunged 6.44 per cent and 5.41 per cent respectively. Extending its fall for the fourth straight day, the Nifty closed the session at 9,820.25, down 87.80 points or 0.89 per cent on Thursday and the Sensex ended the day at 31,531.33, losing 266.51 points or 0.84 per cent.

“Wednesday was a example of how stock-specific destruction happens and market surprises by its sudden or unexpected reversals. On Thursday, we saw stocks in the midcap counters plunging more than 5-10 per cent with ease. Such development can be horrifying for a short-term trader. We have been repeatedly advising to stay light in the market. Going forward, our market is likely to remain under pressure,” said Sameet Chavan, Angel Broking.