The Hindu Business Line : Nightmare on D-Street

“Ever since the statute was installed on January 9 this year, the market has been volatile and uncertain. Not only the direction the bull faces is wrong, but its posture gives the feeling that the animal is fleeing. I have brought it to the notice of the authorities many times, but nothing was done about it,” he says.

Vyas is joined by his fellow-investor, Raj Patel, before the BSE building on Friday.

“If they do not want to demolish the statute, why do not the authorities wrap a cloth around it and see whether fortunes change after a few weeks?” Patel asks.

Vyas and Patel were amongst the large crowd that gathered before the BSE building, their despair-lined eyes glued to the giant screen before the building that was relaying the horror story of stocks on Friday.

It was, indeed, another day of nightmare on Dalal Street.

As the Wall Street-triggered carnage tore through global financial markets, Indian stocks took a battering during the day.

Although the Sensex recovered slightly after a 1,000-point debacle in the early hours of trading, it did little to dispel the despair among investors.

As the nightmare unfolded on the screen, investors began to blame it on issues ranging from the credit crisis in far-away geographies to the bull statue before the BSE building, even as they took stock of their positions on their notepads.

P.S. Kulkarni, an investor, has found a way out to beat the bear play on the stock markets. He has pulled out nearly 50 per cent of his stock holdings of about Rs 50 lakhs and diverted it into the commodities markets.

“I have withdrawn half my stock holdings and bought up copper and nickel futures. I feel metals will provide better returns in the short term, as the stock markets will take time to recover. I am betting on even metal stocks,” he says.

Talking to a cross-section of investors, it becomes clear that their confidence in the markets has been shaken like never before and it will take quite some time to recover.

“I do not think that the markets will recover in the next one to two years,” says Rupen Patel, a retired Government employee, who has invested a significant slice of his retirement benefits in the markets.

However, most investors are not willing to completely exit.

“I feel this is a good time to buy. I will be buying even if the market slides to 9,000. Exiting now will mean huge losses — my advice to investors is not to lose faith at this point,” Bharat Shah, a senior officer in UCO Bank, says.

In fact, some of the day-traders have used the Sensex fall to make a quick buck.

For example, on Friday, as the Sensex started on its downward journey, a few day-traders put out ‘buy’ option on select stocks and later in the day, as the market picked up, they sold, leaving them a sliver of profit at the end of the day. Day traders take the risk to play even in a high volatile market.

Says Unni Nair, a retail investor: “It is important to hold on to your stocks now. In today’s market long-term investors, who are prepared to hold their positions in the next two to three years, will survive. Short-term investors will suffer.”