On the eve of the muhurat trading, the mood is sombre among both investors and brokers. “It is depressing to compare my present portfolio with what it was even in the beginning of October,” says Ritu Makhija, an investor.
The savage fall, by over 35 per cent, in the markets in October alone has not left many in the market unscathed.
“No miracle is going to happen in the markets just because it is Diwali. We do not expect clients to conduct any big trades,” said Anita Gandhi, head-institutional business, Arihant Capital Markets. Even domestic institutions such as insurance firms are placing relatively fewer orders compared to the last few years, said institutional dealers.
The Bombay Stock Exchange (BSE) Sensex has fallen 32 per cent since the beginning of October, largely driven by foreign institutional investors (FIIs) selling and hedge funds faced with redemption pressures back home.
Meanwhile, there are other brokers such as Kotak Securities, who are offering incentives for people to trade on the muhurat trading day. Trading will take place from 6.15 pm to 7.15 pm. In a special offer, Kotak Securities has announced the ‘double dhamaka’ contest, where investors can win prizes if they generate a certain volume through trading tomorrow.
Among high networth individuals (HNIs) too, the fear is palpable. After the recent liquidity crunch in the market, Arvind Goel, a Mumbai-based investor, redeemed his investments worth Rs 5 crore in a fixed maturity plan (FMP) at a whopping loss after paying an exit load of 2 per cent on his investments.
Another Bangalore-based HNI called up his broker and told him that once his FMP matured, he wanted his money back.
“What money people could have earned six months earlier, they can now make only in a year’s time. People are re-orienting their return expectations from this market,” said Akhilesh Singh, business head at Emkay Share and Stock Brokers.
Investors, who were investing in unrated papers with high coupon rates in search of better returns some months ago, are taking no such risks now. They are now more conscious about the quality of credit as the whole subprime issue is centred around credit quality.
At times like these, fixed deposits have emerged as a safe haven for investors. According to RBI data, fixed deposits witnessed a sharp growth of 22 per cent from Rs 24,43,840 crore a year ago to Rs 29,81,563 crore on October 10.
