Panic selling at UP exchange
THE UNPRECEDENTED fall of the sensex on Monday hampered trading at the UP Stock Exchange (UPSE). The investors remained glued to computer screens to keep track of market developments. Many investors were seen making efforts to find an opportune period to sell off their shares.india Updated: May 23, 2006 00:19 IST
THE UNPRECEDENTED fall of the sensex on Monday hampered trading at the UP Stock Exchange (UPSE). The investors remained glued to computer screens to keep track of market developments. Many investors were seen making efforts to find an opportune period to sell off their shares.
However, the brokers could not convince the investors to be patient and have confidence in the capital market.
The investors insisted upon selling off shares at an opportune time without waiting for further strengthening of the market.
After the re-opening of the trade at BSE and NSE after the suspension of trading for about an hour, the small investors heaved a sigh of relief.
Purchases made by banks and LIC not only improved the market conditions but also restored the faith of the small capital players in the market.
President of UPSE Brokers Association Sushil Kanodia told HT that the present situation had arisen because of introduction of future option trade. The fluctuations in the market caused heavy losses to the brokers and the investors alike, he added.
He said that the government should promote INDONEX and regional stock exchanges to protect the investors from losses.
On the other hand, a former director of UPSE Vivek Saran told HT that such situations were a common phenomenon of the capital market, particularly in a developing country. The small investors should wait and watch instead of rushing to sell out.
Patience could help the investors gain better results after some time. Decisions taken in a hurry could not be termed as wise, he said. The main reason behind the sensex bleed was the US economy which dominated the Asian market, he said. Minor changes in the US market affected the Indian capital market.
He said since the government was serious about stabilizing the capital market, the sensex would witness a new trend by Tuesday and the uncertainty about the capital market would soon be under control.