Thursday’s bloodbath in the stock market came as a rude jolt to investors in this part of the country who failed to pick up global cues to the downtrend. A back-of-the-envelope calculation pegs the loss incurred by investors in Vijayawada-Guntur region alone at over Rs. 200 crore.
The Sensex dipped by over 800 points and eroded the wealth of investors in the country to the tune of over Rs. 3 lakh crore on a single day.
Just a day ago, the bourses did not show any signs of a sudden fall, but as banks speeded up the cleaning of their balance sheets in reaction to tough posturing by the Reserve Bank of India against their non-performing assets and other global developments impacted the movement of stock prices, the sharp slide began in the morning and reached alarming levels towards the close.
G. Satyanarayana, a stock market veteran in the city, working for a leading Delhi-based broking firm, told The Hindu that hectic activity in the Futures and Options (F&O) segment was a major reason that brought the downfall, and that there were other factors like extreme volatility in the prices of crude oil and gold that caused the BSE Sensex and NSE Nifty hit new lows.
Besides, the slowdown of Chinese and Japanese economies contributed to the massive erosion of stock values in India.
The government has also done nothing much to curb short-selling, which was seen on a large-scale, he observed.
M.C. Das, a management consultant and a long-time investor, attributed the phenomenon to escalation in gold prices and a rapid decline in prices of oil across the world market.
The fall in oil prices adversely affected the stocks of Oil Marketing and some reputed automobile companies. However, blue chips with strong fundamentals across the spectrum withstood the shock.
He asserted it was traders who were scouting for short-term gains that bore the brunt of the crash but not regular investors.
“The latest fall is not at all a reason for panic selling. Markets will pick up in no time, as stocks tend to rebound from whatever levels they have plummeted to,” he added.
The latest fall is not at all a reason for panic selling. Markets will pick up in no time, as stocks tend to rebound from whatever levels they have plummeted to.
M.C. Das,
Management consultant
