Since January this year, Sensex has lost 6.5 per cent. The market claims that the present fall is due to the Corona virus effect but apart from this there could be many other issues including the disappointment soon after budget. Many investors have lost substantial amount of their investments due to this prolonged dampening sentiments. Investors from Goa too have been affected.
On Wednesday, the 30-share Sensex closed the highly volatile session 0.55 per cent or 214.22 points lower at 38,409, while the 50-share Nifty closed 0.43 per cent or 49.10 points lower at 11,254. Earlier in the day, BSE barometer Sensex fell as much as 2.01 per cent or 777.60 points to 37,846.10. Domestic stock markets extended recent losses since February 1 when it plummeted below 40,000 points with benchmark indices hitting lows. Weakness across sectors - led by banking, automobile, information technology and metal stocks - dragged the markets lower.
One of the top officials of a renowned stock broking company, who did not want to be quoted, said that Goa too which has around four lakh “conservative investors” have suffered the brunt of this. “However, many Goans have invested through SIP and mutual funds and are passive investors. It is relatively safer than open stock market. I think the market was expensive and it is undergoing correction at the moment, which was needed. The market had gone up as there was huge liquidity in the system and many corporate earnings were parked here in the market and now there are withdrawals,” he added.
The High Networth Investors (HNI) instead of investing in equities and his own business started investing in the stock market rather than borrowing from the banks and now they are withdrawing, added the source who is a senior official in a renowned securities company in Goa. “People who have invested directly into the stock market should hold on as the market will course correct and rise later. Whatever happens is for a temporary phase,” he added.
Sandeep Shivani is an investor and has retired as a head of a stock broking company. He has suffered a loss of Rs 10-15 lakh due to this crash in the market. “Yes, I have suffered. Thankfully Goans are very conservative in their approach towards investment and they are long term investors by playing it safe and investing in mutual funds and SIPs. Yet, Goans may have lost an estimated Rs 500 crore by this yoyo market now. The blue chip companies share valuation has dipped drastically,” added Shivani.
He added that in the long run it will recover. “What goes up will go down and what goes down will go up. However, this phenomenon is only applicable with strong shares,” hoped Shivani.
Cyril D’Souza, Regional Manager of Arcadia Share and Stock Brokers Pvt Ltd, Panjim, is of the opinion that in futures, there are some investors in Goa and they will be affected and many have been affected. “Goans believe in safe investments. People are aware now due to media and technology has changed today as we have online trading these days. You need to have patience in the market. It is a cycle which affects all and then it recovers. Patience is the key,” said D’Souza.
Pascoal Menezes Regional Manager of Arcadia Share and Stock Brokers Pvt Ltd, Mapusa, believes that Foreign Institutional Investors (FIIs) may have invested over Rs 20,000 crores in the market and now they have withdrawn. “It is a simple demand supply gap. If they (FIIs) have withdrawn their invested amount someone needs to fill that gap by investing. If it does not happen then the market is bound to go low and remain so till it get funds from new investors. To invest in the market directly one has to be very well read and not depend on advises given on hearsay” Menezes added.
As far as the stock market history of being affected by the virus is concerned, the Sensex had lost about 10.07 per cent during SARS outbreak during January-March 2003, but gained 83 per cent a year after the outbreak. Similarly, the outbreak of the Avian Influenza (Bird Flu) during January to August 2004 Sensex lost 12.23 per cent but market gained by 50.33 per cent in one year post the outbreak. Ebola virus outbreak during December 2013 to February 2014 too affected the market and it lost 1.58 per cent but gained 39.02 per cent in a year post that. For the markets, Zika virus which hit between November 2015 to February 2016, was the deadliest so far and it lost 13.14 per cent but could gain only 24.12 per cent.