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Sensex gains 5.9 per cent in 2018, but investors poorer by Rs 7.25 lakh-crore

The BSE benchmark Sensex has gained 2,011.5 points, or 5.90 per cent, in 2018, aided by gains in large cap stocks.

Stock markets on Monday ended the last trading session of 2018 on a sluggish note but the benchmark Sensex clocked gains for the third straight year in a row in a period marked by high volatility and capital outflows.

On Monday, the 30-share BSE Sensex fell 8.39 points, or 0.02 per cent, to finish at 36,068.33, while the broader NSE Nifty edged lower by 2.65 points, or 0.02 per cent, to 10,862.55.

The BSE benchmark Sensex has gained 2,011.5 points, or 5.90 per cent, in 2018, aided by gains in large cap stocks.

However, over the last 12 months, investor wealth eroded by Rs 7.25 lakh crore as mid and small caps faced a major correction. The market capitalisation of the BSE-listed companies slumped by Rs 7,25,401 crore to Rs 1,44,48,465 crore this year. From its all-time peak of 38,989.65 scaled on August 29 this year, the Sensex has fallen by 2,921.32 points, or 7.5 per cent, to 36,068.33.

The Sensex had given a 28 per cent return in 2017. In 2016, it had gained nearly 2 per cent. Similarly, the broader Nifty climbed 332 points, or 3.2 per cent, for the year 2018. The 50-share NSE index had rallied 28.65 per cent in 2017. In 2016, the rise was 3 per cent.

During the year 2018, the Sensex zoomed to a high of 38,989.65 on August 29 and plunged to a low of 32483.84 on March 23. The last day of the year opened with gains tracking positive global sentiment on account of progress in US-China trade deal while global growth uncertainty prompted investors to turn risk averse which was visible in profit booking.

Analysts said the general elections, crude oil prices and trade sanctions would influence the market in 2019. "In 2019, the immediate attention could be on the impending general elections, but the basic direction of the market would, to a large extent, be determined by the interest rate policy of the Fed and the RBI, the direction of the oil prices, as also the further developments in the context of the US-China tariff war and the fears of a hard Brexit," said Joseph Thomas, Head Research, Emkay Wealth Management.

Dhiraj Relli, MD & CEO, HDFC Securities, said, "the broader market could do well especially in the second half of CY19 on expectations of earnings pickup among Indian corporates post Q4 of FY19 along with resumption of FII flows into India around and post general election time. Mutual fund inflows in India are on a structural upmove driven by greater financialisation of savings. Softening stance (including a probable rate cut) by the RBI in early 2019 could help valuations."

According to him, investors have become more choosy about governance and capital allocation decisions made by company managements. "Many small-cap and mid-cap companies and even some large-cap ones may fail the test of survival in an era of constant disruption-be it owing to regulations, technology or capital availability. Retail investors should learn from market moves and may also want to upskill themselves regarding the ways of the markets, and inpidual stocks' financials/valuations," Relli said

Relli said a staggered investment in direct equities after sufficient due diligence may result in lowering their risks in an era when the world is witnessing a paradigm shift in business models and the valuations assigned to them.

Rupee ends year at 69.77/$

Mumbai: The rupee on Monday ended the last trading session of 2018 with an 18 paise gain at 69.77 per dollar, but clocked a 9.23 per cent fall this year as it experienced one of the tumultuous years in the recent past.

The rupee depreciated by a whopping 509 paise, or 9.23 per cent, as compared to 2017-end level of 63.87. Forex traders, however, said fundamentals are supportive for the rupee over the next six-twelve months amid supportive growth momentum and robust forex reserves.

"Attractive real yields (net of inflation), growth momentum and robust forex reserves of $394 billion and USD stabilisation is likely to be positive for the INR," global financial services major Standard Chartered said in a research note.

However, in the near-term, the trend in the US dollar, oil price and ensuing general elections will determine the direction for the local unit, it noted. -With AGENCIES