Sensex tragedy: 3 years of gains evaporate!

Three years of gains in the Sensex have vanished in the coronavirus-triggered global stock market crash. Today, the 30-shares index, which was well above 40,000 a month ago, closed at 28,288.

But that's not all - it even recorded 52-week low of 26,714.46 during the day before recovering. The index swayed 2,656 points during the day.

The last time Sensex hovered around 26,000-28,000 was three years ago; Sensex had closed at 28,301 on 16 February 2017. Since then the Sensex has seen 763 trading sessions.

Unfortunately, all the gains made by investors in these sessions have now been wiped out.

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BEAR RUN

Investors are staring at a bear run with very little hope of an uptick in immediate future. This is the eighth time it has happened since 1990. A bear run is a phase when the market sees a 20 per cent or more drop from its all-time high value.

Coronavirus outbreak has brought an 11-year long bull market to a halt.

On 14 January this year Sensex recorded its highest ever closing of 41,952.6. Since then it has shed 13,664 points or 32.6 per cent of its value. That's one third of the entire Sensex.

The ongoing bear run ranks on the fourth spot in comparison to the eight other times Sensex has witnessed bear markets.

The worst was the 2008 bear run triggered by the global financial crisis. Sensex had then shed 60.9 per cent of its value.

But, just to remind, the ongoing bear run is still not over; Sensex is recording fresh lows virtually every trading day.

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KEY REASON

And a large part of the reason is the exit of foreign Institutional Investors (FIIs). They have sold Rs 1.38 lakh crore worth of equity investments and bought Rs 98,100 crore worth of equity instruments in March so far.

That puts their net investments at a negative Rs 39,880 crore.

However, the Domestic Institutional Investors (DIIs) have held the fort. The DIIs have sold equity instruments worth Rs 61,686 crore and have bought instruments worth Rs 99,049 crore. That puts their net investments at Rs 37,362 crore.