WHERE HAVE the city’s rich traders been parking their cash for the past six months? It’s in the commodities market.
But, you won’t believe that because they are the ones who have also been raising their voice against abnormal price hike in the commodity market.
However, everybody knows that price hike in the market has been the side effect of their betting game. The small wholesalers and retailers of wheat and other essential items from other parts of the State resenting the galloping commodity prices have only bolstered the confidence of these rich traders to continue bidding heavily in the commodities market as a surefire recipe for ensuring profits from highly lucrative commodity markets.
The major buying interest among traders in the commodity markets is in wheat, guar seed and a class of edible oils besides gold, silver, copper, mentha and crude oil listed in the commodities market resulting in huge volumes being generated in commodity futures.
The daily trading volumes in the city as far as stock markets are concerned have dipped by almost 40 per cent during the past one month. However, the commodities market has evoked the interest of HNIs who are not willing to wait for another six months for the stock markets to bounce back, informed a leading city-based broker. Many traders who have suffered huge losses in the last stock market crash have also found commodity markets as a safer investment haven, he said.
The fall in the trading volumes in stocks is being compensated by galloping volumes in the commodities market with the prospects of a good monsoon across the country.
“Commodities markets are fairly volatile right now but not as risky as the stock market. This is prompting quite a few rich traders to put their cash in heavily traded commodities such as wheat besides gold, silver and crude oil”, he added.
“The commodity markets are witnessing huge interest especially in gold and silver. It’s still not known how much of interest had been generated in potatoes which had just been included for trading in the National Commodities and Derivatives Exchange (NCDEX)”, commented Mradul Verma, Regional Head of Sharekhan, the retail broking arm of Sharekhan Ltd.
He said the commodity markets have evoked interest among all classes of traders who find it convenient to hedge their investments against extreme volatility found in stock markets. It was obvious for a large number of High Networth Investors (HNIs) to shift their focus to the commodity markets as the stock markets would take some time to bounce back. Moreover, a large number of new investors are entering the stock market after finding the valuations of blue chips stocks affordable, he added.