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Our Bureau

Mumbai, Oct. 28 Sit out the bad times but facing westward for cues, for everything in the Indian stock market now hinges on the international markets and the pressure on that investment animal — the FII — to sell or not to sell.

This seemed to sum up the thinking of brokers and other marketmen gathered at the convention hall of the 134-year Bombay Stock Exchange for the annual Lakshmi Puja and Muhurat trading that mark the ritual start of buying and selling for the traditional year.

“There is nothing fundamentally wrong with our economy. It is only price damage that has happened. It is a liquidity problem. We have to wait for the market to bottom out and stabilise. When exactly that will happen will depend on the FIIs,” said Mr Dinesh Thakkar, Chairman & Managing Director, Angel Broking, one of the 10 brokerages that were felicitated for high volumes of trade on BSE.

To be sure there were more media persons than brokers at the event, more observers than the observed; and some of the 10 brokerages recognised for top volume-creation on BSE had not even bothered to send representatives to collect their awards, or had sent junior hands.

For some time it looked as though the media persons only had each other to photograph, but a trickle of representatives from broking houses did make its way in later.

Last year the same puja had seen the hall full of brokers, many with their entire family in tow, remarked one old-timer.

Mr Thakkar of Angel Broking, who has been trading at BSE since 1988, was optimistic. “I would say this situation is much better than the 2001 fall, when we did not know what would happen next. Here we do know where the future lies.”

Then nobody knew what would happen after the dot-coms and tech companies went bust, or where growth would come from. Now, there is no doubt that the Indian economy is headed for growth. “Our companies are very mature,” he added.

Retail investors, though it is the best time for them to pick up stocks that they could never have dreamed of earlier, are just not biting. After the January debacle, they have not quite come out of the woodwork.

Whoever started investing systematically at every fall also stopped buying because there seemed no end to the fall, said Mr Jatin Damani, Vice-President and Head, NBFC, Bonanza Portfolio.

Damani expects a new set of retail investors to enter the market, as the existing ones having burnt their fingers “very badly”.

Old-timer Mr Kisan R. Chokey, Chairman of KR Choksey — kept busy by several younger market men who come to touch his feet and seek his blessings — says Government intervention is necessary to encourage people to invest. “We need an equity stabilisation fund of at least Rs 30,000 crore when these things happen. Banks and institutions can contribute to this fund.”

Levies such as capital gains tax, securities transaction tax and dividend tax can be lightened, he adds. “The situation is not good. Sooner or later, banks and later corporations will also get affected.”

Outside BSE, a citizens group calling itself Lakshya had a banner on display asking for October and November F&O to be extended till December expiry. Closing expiries for these two months before resolving the issue of overseas lending and borrowing by FIIs and their consequent short-selling in the domestic markets would be an injustice to genuine investors, said the banner.

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