Bloodbath on bourses squeezes small investors on Diwali-eveOctober 27th, 2008 - 7:40 pm ICT by IANS
New Delhi, Oct 27 (IANS) Investors, both small and big, were Monday ruing the fact that the relentless erosion in their investment portfolio has of late taken much of the festive sheen off Diwali.The 30-share Sensex, the key Indian equities index of the Bombay Stock Exchange, fell below the 8,000-point mark in intra-day trading on the first day of the trading week, to its lowest since end-2005.
Worse, the rupee crashed to an all-time low Monday, falling to Rs.50.23 to the dollar.
Chetan Sehgal, a 21-year college student and part-time investor, said he has experienced a 50-60 percent dip in his portfolio in the past few months, and was disappointed that the recovery he expected during the festive season just didn’t happen.
“I will stay invested, there is no point in selling at a loss, but now I think the market will recover only by late-2009 or early 2010,” Sehgal said.
Saying that while it made sense to invest in the market now as stock prices are low, he nevertheless added: “I am being cautious, I will not make any major investment, I will keep my exposure low.”
In Chennai, which celebrated Diwali a day earlier than Delhi and other north Indian cities, mutual fund investor Sudha Ramachandran was downcast; she has seen her portfolio being whittled away by over 45 percent in recent weeks.
“I was planning to buy a King George medallion like I do every year. This year, having lost money, I am buying just one gram of gold and it is more for sentimental reasons,” Ramachandran said.
Explaining the bloodbath in the equities that has hit small investors such as Ramachandran, Apoorva Shah, head research (institutional equities) at Prabhudas Lilladher, said: “It has been a continuation of what has been happening during the past few days. FIIs are selling in India.”
Over the past year, FIIs or foreign institutional investors are believed to have offloaded Indian stocks valued at an estimated Rs.121 billion (Rs.12,084 crore), bringing the equities market crashing down.
The top 10 firms have seen their combined market capitalisation eroding by Rs.1.5 trillion (Rs.1,500 thousand crore) in the crash.