Did you make money in morning mayhem? Top dogs got very little
, ETMarkets.com|
Updated: Dec 18, 2017, 04.58 PM IST
NEW DELHI: When stocks crashed in a knee-jerk reaction to early vote count trends in Gujarat early Monday, smallcap czar Porinju Veliyath wanted to pluck those falling stocks with both hands.
But there weren't many, says Porinju.
"I was sitting on some cash, and the Nifty was down 250 points. I tried some five-six counters to buy some Rs 20-30 crore worth shares. We could hardly get some 4-5 crore."
This was the experience of anybody who are not monkeys and who tried to buy shares today morning, Porinju said. Quality midcaps were not available.
Analysts say the morning panic showed only in price. But people could not get shares of good companies, especially those which have no F&O position.
Dalal Street investors, who had been cheering various exit poll projections last week, got a rude shock on Monday morning when the vote count in the Gujarat elections began.
As the scorecard suggested an early lead for the Opposition Congress, stocks took a tumble.
Some brokerages had last week advised their clients to take the exit poll projections with a pinch of salt. Some even advised investors to stay light ahead of the election outcome.
Hats off to the traders who were willing to trade on such noise, said Nilesh Shah, MD, Kotak Mutual Fund.
"They do create liquidity in the market. But my guess is, a majority of them actually ended up losing money rather than making money," Shah said.
So why does a state election matter so much to Dalal Street?
The Sensex had fallen 800 points at its lowest point in intraday trade. The index witnessed a 1,200-point swing through the day, which suggested that there was much more at stake for the market in this election.
The election outcome is likely to be viewed as a referendum on Prime Minister Modi's performance and could have an impact on future economic policy, said Nomura India. Some analysts called it a semifinal to the 2019 general elections.
Sanjiv Bhasin, EVP-Markets and Corporate Affairs at IIFL, said a slightly negative verdict could bring in populist measures going ahead, and that may spoil the party on Dalal Street for the time being.
Sanjeev Prasad, Co-Head and Managing Director at Kotak Institutional Equities, believes a victory for the BJP would be received well by the market, while a surprise defeat (against exit poll forecasts) would be a large negative surprise.
"In the former case, we see a modest rally, and in the latter, a moderate correction as the market will also start focusing on India's weakening macro position," Prasad said in a note.
The important thing to remember is not the message we interpret, but the message which the BJP and the government interprets, said Gautam Chhaochharia, Head of India Research, UBS.
"If the government interprets this as a message that is anti-reforms and goes back on their policy stance, then it will be a big negative for the market. If it interprets the message just as a short-term knee-jerk reaction to the short-term disruption of GST and demonetisation and over the medium term and the population also understands the benefits from those, then they will not change their reforms agenda," Chhaochharia said.
There is still about 18 months left for the 2019 elections.
Rajat Sharma, CEO at Sana Securities, said if the results do come out in favour of the BJP, that would be really positive for the market.
"Gujarat has got many big business houses. They would like the government in power to come back or to retain power so that everything keeps moving smoothly. So, it's best to wait for the final outcome," Sharma said.
But there weren't many, says Porinju.
"I was sitting on some cash, and the Nifty was down 250 points. I tried some five-six counters to buy some Rs 20-30 crore worth shares. We could hardly get some 4-5 crore."
This was the experience of anybody who are not monkeys and who tried to buy shares today morning, Porinju said. Quality midcaps were not available.
Analysts say the morning panic showed only in price. But people could not get shares of good companies, especially those which have no F&O position.
Dalal Street investors, who had been cheering various exit poll projections last week, got a rude shock on Monday morning when the vote count in the Gujarat elections began.
As the scorecard suggested an early lead for the Opposition Congress, stocks took a tumble.
Some brokerages had last week advised their clients to take the exit poll projections with a pinch of salt. Some even advised investors to stay light ahead of the election outcome.
Hats off to the traders who were willing to trade on such noise, said Nilesh Shah, MD, Kotak Mutual Fund.
"They do create liquidity in the market. But my guess is, a majority of them actually ended up losing money rather than making money," Shah said.
So why does a state election matter so much to Dalal Street?
The Sensex had fallen 800 points at its lowest point in intraday trade. The index witnessed a 1,200-point swing through the day, which suggested that there was much more at stake for the market in this election.
The election outcome is likely to be viewed as a referendum on Prime Minister Modi's performance and could have an impact on future economic policy, said Nomura India. Some analysts called it a semifinal to the 2019 general elections.
Sanjiv Bhasin, EVP-Markets and Corporate Affairs at IIFL, said a slightly negative verdict could bring in populist measures going ahead, and that may spoil the party on Dalal Street for the time being.
Sanjeev Prasad, Co-Head and Managing Director at Kotak Institutional Equities, believes a victory for the BJP would be received well by the market, while a surprise defeat (against exit poll forecasts) would be a large negative surprise.
"In the former case, we see a modest rally, and in the latter, a moderate correction as the market will also start focusing on India's weakening macro position," Prasad said in a note.
The important thing to remember is not the message we interpret, but the message which the BJP and the government interprets, said Gautam Chhaochharia, Head of India Research, UBS.
"If the government interprets this as a message that is anti-reforms and goes back on their policy stance, then it will be a big negative for the market. If it interprets the message just as a short-term knee-jerk reaction to the short-term disruption of GST and demonetisation and over the medium term and the population also understands the benefits from those, then they will not change their reforms agenda," Chhaochharia said.
There is still about 18 months left for the 2019 elections.
Rajat Sharma, CEO at Sana Securities, said if the results do come out in favour of the BJP, that would be really positive for the market.
"Gujarat has got many big business houses. They would like the government in power to come back or to retain power so that everything keeps moving smoothly. So, it's best to wait for the final outcome," Sharma said.
