Retail investment takes a hit as sensex continues to plummet

The first timers prefer to stay at a distance, the seasoned rue the huge losses already suffered and the usual trading sessions are now left with a few active participants.

The first timers prefer to stay at a distance, the seasoned rue the huge losses already suffered and the usual trading sessions are now left with a few active participants. As the Sensex continues to plummet further, breaching all the previous lows, retail investors are neither coming forward for daily trading nor for long-term investment.

The opening of the new demat accounts has completely shrunk, say the city brokers, and the day trading sessions have gone down to a mere 20 per cent of the usual active participation.

“The retail investor is obviously scared to enter,” said M L Batra of the Angel Broking at Panchkula, gauging the overall sentiment in the market, while adding that business has reduced by 30 per cent.

“Compared to the beginning of the year, when there was a huge waiting list of newcomers getting their demat accounts opened, the requests to open accounts has practically disappeared,” he added.

Batra still manages to give a bold advice to investors — of going in for quality stock pickings at cheap rates available in the market. “There is definitely scope for some intelligent buying,” he said.

The scenario is bleak for investment in the markets, says V Kumar of the V Kumar of the Viksons Finance and Investments Limited.

“From opening 1,000 demat accounts a day, we now get an occasional request from one or two people, willing to start investment in the market. Things are definitely getting from bad to worse and the scenario may change in at least 3 – 4 months only,” he says.

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“The day trading sessions was earlier a hectic affair but now the number of people coming has gone down,” he said, while adding he is advising the retail investors to hold to the cash and let the markets stabilise before investing again.

But as the markets tumble time and again and with the investors’ wealth eroded up to 50-60 per cent, people are now increasingly opting for investment in gold or keeping their money in safe fixed deposits, especially with the banks offering handsome interest rates, generally in double figures.

“I have some investments in shares, where the values have corrected up to 50 percent. I can hold these. But since I cannot afford anymore investments in this bleak scenario, gold appears a good option for investment if the markets recover. Otherwise, for salaried person like me, fixed deposits are the most attractive option at the moment,” said Sanjeev Sharma, working in the private bank here.