Market boom leaves brokers unmoved, hoping for correction

Market boom leaves brokers unmoved, hoping for correction
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First Published: Wed, Jul 04 2007. 12 59 AM IST
Updated: Wed, Jul 04 2007. 12 59 AM IST
The benchmark Sensex on the Bombay Stock Exchange (BSE) might have hit a new high in early trade on Tuesday. But the further one moves from Dalal Street, the less buzz there seems to be about it. For instance, in Ahmedabad, the only excitement among brokers is that of having made a killing on a particular stock.
“It has made no difference to my life as it is purely a speculators market. It may be surprising, but many of my stocks have not even moved an inch despite the stock index being the highest. And they are not underperformers in terms of earnings and profits,” says Sarit Choksi, a builder who also invests in the market.
His indifference is shared by Rajan Desai, the owner of a small firm and an investor for over two decades. “I have seen many such records in last one year and having seen the 4,000 mark, this 14,816 mark is a bit difficult for me to digest. It is the market for speculators and it is a matter of time that the Indian stock market would see a meltdown. Or else how can you justify a stock of a loss-making company trading at an all-time high, with little scope of growth and at a very low EPS (earnings per share)?” he asks.
Others, though, sense an opportunity. A sub-broker sitting in the Ahmedabad Stock Exchange, but trading primarily on BSE and the National Stock Exchange platforms for over 10 years, Shilpesh Shah says that he has advised his clients to simply play the momentum and make a quick buck or invest in the markets for a long-term.
“For us, long-term is six months and above. Today the concept of medium-term, too, has changed as it could be above a week. I feel that the present momentum in the stock markets would continue and we could see Sensex above 16,000 by the end of this year, but if correction comes now it would be good for the market,” Shah said.
But even Shah is a bit sceptical, saying that there could never be one-sided movement of the market and it would definitely move down in the short- to medium-term.
However, not everybody is so pessimistic. Ask Nilesh Kotak of broking firm Dhanvarsha Finvest and he will tell you that his clients have started asking him about where to invest, unlike earlier, when they were more cautious about investing in the equity market.
“I and my clients are bullish and selling pressure is less. Today my clients ask for recommendations to buy a new scrip. Moreover, they have shifted from the primary market to the secondary market as they do not want to block their money even for over a month and want to buy directly from the secondary market,” he said.
But his optimism is tempered by realism, and he, too, believes that a downtick is in the offing. And the immediate trigger, Kotak believes, could come from a hike in the petrol and diesel prices, which he thinks is inevitable given the high cost of crude in the global market.
And then there is the question of other markets picking up steam, and attracting foreign institutional investor away from Indian bourses. “If you look at the US and European data, they seem to be on the revival path. Japanese, too, have clocked good growth. So the going looks good. Technically, the (Indian) market looks overbought and there could be some kind of a small correction,” Kotak says.
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First Published: Wed, Jul 04 2007. 12 59 AM IST