2011: Stocks ditch investors, gold remains true friend

As the investors burnt their fingers with heavy losses in the stock market in 2011, the tried-and-tested gold added to its glitter and silver could retain only part of the sheen it gained during the year.

On the stock market, all investor classes together lost a whopping Rs 19.5 lakh crore or about 25 per cent of their wealth during 2011 -- making it the second worst year ever.

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On the other hand, the gold has turned out to be the best asset class with a 31 per cent surge in its price, followed by its distant cousin silver, which gained about eight per cent.

And it was not only the small and retail investors bearing all the brunt, as large corporate houses of the likes of Tatas, Ambanis and Birlas also saw the market wealth of their groups plummeting sharply this year.

Tatas ended the year as the country's most valued group with a total market cap of over Rs 3.85 lakh crore, followed by Mukesh Ambani-led Reliance Industries Group (Rs 2,27,321 crore) and Deepak Parekh-led HDFC Group (Rs 1,97,121 crore) on the second and third positions.

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However, almost all the large business groups saw their market values plummeting during the year.
In terms of losses from their peak valuations, Mukesh Ambani group suffered the biggest decline of over Rs 1.3 lakh crore, while Tatas came second with a loss of about Rs 1.2 lakh crore.

Out of the total loss of about Rs 19.5 crore, the retail investors are estimated to account for less than 10 per cent, while over 60 per cent of this cumulative figure was suffered by the promoters.

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The remainder was in the accounts of other investors like banks, funds and foreign investors.

In percentage terms, the losses for overseas investors were larger at 36 per cent, on account of a sharp depreciation of about 19 per cent in the rupee value against the US dollar - from Rs 44.70 at the end of 2010 to Rs 53.10 on Friday.

Within stocks, losses were much larger for mid-cap and small-cap segments, as against the blue-chip Sensex stocks.

While the Sensex fell by 25 per cent, the mid-cap index was down 33 per cent and the small-cap index lost 42 per cent.

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Remaining the best asset class, the gold prices began the year at Rs 20,890 per ten gram and went on to rose to Rs 27,410 as of  December 30.

On the other hand, the silver prices has risen from Rs 46,500 per kg to Rs 50,300.

During the year, the gold prices had risen to close to Rs 30,000 level, while silver had gone close to Rs 60,000 at one point of time. While the gold prices managed to retain most of their gains, the same was not the case for silver.

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While there are no official records, the market has been abuzz with reports that a number of large investors suffered huge losses after betting big on silver prices.

In the stock market, the total investor wealth dipped by Rs 19.46 lakh crore in 2011, as against a gain of Rs 12.14 lakh crore in 2010.

Prior to that, the investors wealth had grown by about Rs 30 lakh crore in 2009, after falling by over Rs 40 lakh crore in 2008.