Mumbai: Reena Jani, a 32-year-old day-trader, is sure Sensex will not go up very soon. Still, the short-term investor who had exited the market last month when the index moved above the 14,000 mark, is waiting to re-enter the market. She won’t though, until 15 March, following her astrologer’s advice.
Despite the sharp drops in the past few days, Jani is not that much unlike many retail investors. “How much more will it fall? Is it the time to enter or should we wait?” are the kind of questions that the retail clients of most of the brokerage houses in Mumbai have been asking. “After today’s fall, people have started inquiring about the stocks which have fallen the most,” says the head of research of a local stock broking firm who didn’t want to be named.
A home-maker, Jani had entered the stock markets in February 2006 and lost around Rs30,000 in May when the benchmark index dropped about 30% after crossing 12,000. This time, she did not want repeat the “mistake”. She exited the market after making Rs25,000. “I sold when the Sensex was at 14,100. It went up 210 points the next day and everyone in my family told me that I sold early. But now they are all happy about my decision. I can buy more shares of ACC and Siemens now,” she says.
Still, for day traders and speculators alike, the past one week has not been a pleasant one and the mood in the trading rooms across brokerage houses is that of nervousness.
“While the magnitude of the fall isn’t as steep as it was in May 2006, the damage has been quite bad,” saysNihar Oza, vice-president, Bric Securities. According to him, for short-term traders and day traders, the gains made in the past six months would have been wiped in the last one week. “You don’t even feel comfortable calling up clients when they have suffered a loss. But we have to do it,” he says rather philosophically.
Amit B. Shah, a sub-broker with Sunidhi Consultancy, has seen almost 50% drop in the number of calls he gets from his clients. “If the markets keep on falling by 500 points, nobody wants to sell at such a loss,” he says. “Our volumes are 10-15% of the normal trading volumes. Our clients are just sitting quiet,” says Keshav Harlalka at BHH Securities who labels the mood
Rushali Pawar, a dealer with Geojit Securities’ women trading branch in Vile Parle, a Mumbai suburb, has advised her day trading clients to stay away from the markets for the time being. “Earlier these women clients would come in early in the day. But these days, we first try to figure out the support level in the market and then ask them to come,” she says.
Not that every body is a loser in this market. Ketan Malkan, vice-president and head of high networth clients’ desk with India Infoline Securities, cites an example of one of his clients who sold his portfolio of Rs50 lakh last Friday and went short on Nifty Futures. “Today when the Sensex has dropped sharply, he has a notional profit of Rs20 lakh and the whole market is talking about him,” says Malkan.
“Do you need to sell now? Did you plan to cash out at this stage? Do you have a 7-8 year horizon on your equity investment and if so, is this the time you planned to exit?,” asked Gaurav Mashruwala, a certified financial planner as he rattled off all the questions he believes an investor should answer in the affirmative to provide a logical reason for exiting the market now.
If the answer to the questions is in the negative, added Mashruwala, investors should disregard the bloodbath on the bourses. “Investments are for life-needs, not the market’s needs.”
Suman Layak of Hindustan Times contributed to this story.