Mumbai3 minutes ago
- Copy link
The value of 7 of the top-10 companies in the country has reduced by Rs 1.35 lakh crore in this week’s business in terms of market valuation amidst the US tariff and trade deal with tension. During this time Tata Consultancy Services (TCS) was the top loser.
The market cap of the company has come down by Rs 47,487 crore to ₹ 10.87 lakh crore. During this period, Airtel’s value has been reduced by ₹ 29,936 crore, Bajaj Finance ₹ 22,806 crore and Infosys ₹ 18,694 crore.
Hindustan Unilever value increased ₹ 32,013 crore
During this period, the value of FMCG company Hindustan Unilever (HUL) has increased by ₹ 32,013 crore to Rs 5.99 lakh crore. The value of HDFC Bank has increased by Rs 5,947 crore to Rs 15.44 lakh crore.
The market dropped 586 points yesterday, 863 points fell this week
The stock market fluctuated on Friday on the first trading day of August. The Sensex fell 586 points to close at 80,600 levels. The Nifty also declined by 203 points, it closed at 24,565 levels.
Out of 30 Sensex’s 30 shares, 6 shares rose and 24 declined. Sunforma’s stock dropped 4.43%. A total of 18 shares, including Tata Steel and Tata Motors, fell down from 1% to 4.5%. Asian Paints, Trent and HUL climbed 3%.
11 out of 50 shares of Nifty declined and 39 declined. NSE pharma 3.33%, healthcare 2.77%, metal 1.97%, IT 1.85%, realty 1.78%, PSU bank 1.13%. Auto, metal and metal also declined.
What is a market capitalization?
Market cap is the value of any company’s total outstanding stocks, ie all the shares that its shareholders currently have. Its calculation is done by multiplying the total number of issued shares of the company by their price.
Understand this with an example …
Suppose … People have purchased in 1 crore stock market of company ‘A’. If the price of a share is Rs 20, then the company’s market value will be Rs 1 crore x 20 or 20 crores.
The market value of companies increases due to increase in share prices or decreases. There are many other reasons for this …
1. What does the growth of market cap increase?
- Share price- Increased demand for shares in the market leads to competition, due to which prices rise.
- Strong Financial Performance: The company attracts investors in things like earnings, revenue, profits.
- Positive News or Event- Product launch, acquisition, new contract or regulatory approval increases demand for shares.
- Market Service- Bulish market trends or sector specific expectations such as IT sector estimate attracts investors.
- Issuing shares at high price: If a company issues new shares at a high price, the market cap increases without decreasing the value.
2. What does the decreasing market cap mean?
- Decline in share price- Due to lack of demand, the price of shares falls, it directly affects the market cap.
- Bad results- Investors sell shares due to decrease in earnings, losses or losses in a financial year or quarter.
- Negative News- Any negative news related to scandal, legal action, product failure or leadership reduces investment.
- Economy or market decline- The recession, increase in interest rates and below can drop market shares.
- Share buyback or delisting: If a company purchases shares back or becomes private, the number of outstanding shares decreases.
- Industry Challenge: The demand for shares decreases due to regulatory change, technological disorder or declining demand for a sector.
3. What is the impact on the company and investors on market cap fluctuations?
Effect on the company: The big market cap helps the company to raise funds from the market, take loans or to acquire other companies. At the same time, small or low market cap reduces the company’s ability to take financial decisions.
Effect on investors: Increasing market cap provides direct benefits to investors. Because the price of their shares increases. The same, the decline can cause damage, allowing investors to decide to sell shares.
Example: If the TCS market cap increases with ₹ 12.43 lakh crore, then investors’ assets will increase, and the company can get more capital for future investment. But if the market cap falls, it can be damaged.
