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A worried stock broker reacts as the Sensex crashes, at the Bombay Stock Exchange on Wednesday as the trading at the Bombay Stock Exchange and National Stock Exchange was halted after share prices crashed in early trade on Wednesday in Mumbai. The Sensex tumbled 1508 points, or 7.9 per cent, to 17,544 points. — Paul Noronha

Our Bureau

Mumbai, Oct. 17 “It was the worst one minute in my life,” exclaimed Mr Anil Raika, a chartered accountant and an experienced stock market investor, on the opening crash of Sensex on Wednesday. And he had his reasons — that single minute skimmed off close to Rs 1 crore of his net worth, albeit notionally.

Like most other investors, Mr Anil was expecting a Sensex slide after SEBI’s proposed restrictions on the issue of participatory notes by FIIs. “But the one-minute crash stumped me. And then trading was closed. I stared blankly at my computer screen, not knowing whether to sell or buy when trading resumed,” he recalled. However, not every investor was reacted the same way.

For instance, a BSE broker and investor Mr Mahendra Shah, kept his cool. “I was not so surprised by the fall — it was written on the wall. I call such (market) phenomenon a tsunami — it crashes onto land and recedes. You have just got to hold on. Any veteran player will tell you that during such moments there is no point getting panicky and, instead play it safe,” he says. After trading was resumed, Mr Mahendra went ahead picking up some stocks. “I picked up power stocks, for I am always bullish about this sector,” he said.

Talking to a cross-section of investors in Mumbai, it was clear that the investing community was by and large expecting and prepared for a Sensex dip in the morning. But, most of them also appeared to be confident that the market will recover during the day. “For the crash was not an upshot of any selling pressure. I feel it was a systematic closure,” Mr Mahendra stated.

Interestingly, a dealer from another broking firm said, “Before the start of trading, we had lot of sale orders, but before we could execute these, trading was suspended. And after it resumed and market started to pick up, the sale orders (from investors) were quickly cancelled and some even converted into buy orders.”

As the intensity of the initial crash was unexpected, the subsequent pace of recovery was equally surprising by many brokers and investors. Said Mr Manish Sonthalia, Vice-President (equity strategy) of Motilal Oswal Securities: “Last night itself we expected a fall and we were prepared. We did not expect stocks to hit the circuit filter and trigger a close down of the market. But we were more surprised by the speed at which the recovery took place.”

One fall-out of the crash appeared to be the increased interests of retail buyers to enter the trading arena.With the market mercury sliding, retail investors saw the crash as an opening to re-enter the ring. Said an official of a South-based broking firm: “After a long time, there was significant retail buying, as the market surge was only encouraging them to sell. We got significant buy orders from retail investors after the one-hour break today.”

At the end of the day, it was clear that the one-minute nightmare did not bruise the confidence of the investors. “I personally am sure that the Sensex will touch the magical 20K mark by the time we celebrate the festival of lights,” says Mumbai-based broker Ms Surekha Mehta.

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