10 hours on a frenzied floor

March 12 11:30 am Woke up to a rather beautiful morning. Day started well as the news channels said the Nifty opened strong. The markets have been totally out of whack over the past week. Just a year ago, you could throw a dart at a wheel full of stock names, invest in whatever got hit and make a cool return of 40-50%. And now I encounter investors who are contemplating withdrawing money from the equity markets, with whatever little that is left. The travails of an equity investor!!

And damn globalisation!! Chinese markets crash and it hits us living in Dadar, thousands of miles away. One butterfly flutters in Wall Street and poor South-east Asians lose their life savings. A good idea would be to check out the mood on the trading floors.

1:30 pm The moment I step into a broking house at Colaba, I am welcomed by a sight of complacent traders turning wild. Nifty had started taking a U turn. In early trade it had touched a high of 3781, 64 points up from the previous close and was now sliding with every tick. Managed to grab a chair besides a trader and like all others he did not have the time to talk. “Not now, clients need to cut losses,” he barked. He was at two or three phones at the same time. Awesome.

Phones continuously rang around me and the buzz made me actually feel the panic of investors desperately trying to find ways to exit.

4.30 pm Nifty decided to take a break at 3713, a dip of 68 points from the top. During the last lap markets started its slow crawl up to close the day 17 points up from yesterday’s level. A sudden silence engulfed the room. Traders sat back in their chairs for a few minutes looking dazed at their closed terminals. Leaving the place I realised they were famished.

March 13 9.55 am Nifty had given up most of its gains yesterday to close almost flat. Though uncertainty prevails, the mood is not that bad. Global markets are slowly shrugging off the jitters (seamless world, salute!). Nifty should move up. Hopefully. Got ready and headed for the broking house.

As expected, the trading terminals were filled with green coloured price ticks against the respective stock names. Brijesh, a new-kid-on-the-block type trader gets a call to buy some ITC shares at Rs 148. Within a minute or so however the same screen starts transforming into red ticks.

The Nifty had opened with a marginal up tick of 15 points but soon drifted to yesterday’s closing of 3734. Words like mandi and “go short” filled the room. Incessant telephone rings...the traders get antsy. Whoa! Another day of volatility…

Brijesh receives another call and this time it is to place a stop loss of 147 on the ITC stock he bought earlier. By 11.20 am Nifty had bounced to higher levels of 3772 and ITC traded at 150.90. Brijesh swiftly moved into kill and squares off the ITC position. Happy with the profit of Rs 2 per share made for the investor, he says: “With this kind of volatility, a swift intraday trader can make good money in a span of minutes.” He looked relieved. A motley crew of brokers are furiously punching in buy and sell orders for their clients, most of them intraday like the ITC trade.

1.57 pm Nifty has nosedived to the lowest point of the day to stand at 3718, sending blood pressures up north. Everybody seems to be battered. Will this end? At times the daily Nifty graph looks like a V or an inverted V or at times both (see graphs below). Clearly the market is still struggling to find a direction.

I leave Brijesh’s desk and roam around to get a perspective on the market sentiment and bump into Pareshbhai, a seasoned hand. “During last May’s carnage many retail investors booked heavy losses in panic. They were scared…they didn’t put in money when the markets started picking up from June. Not many people have made money in this rally.”

Just before the Budget, Nifty had started correcting from its highs of around 4164. I’ll hazard a guess: investors are still reluctant to back equities. Otherwise how can you explain the low daily turnover of around Rs 38,000 crore (Note to myself: need to check out the highest daily turnover last year. Call KP tomorrow!).

2.30 pm Trading floor is slowly moving to a higher gear. Decibels are rising. And you know the reason: Nifty is again showing some signs of strength. Yes!! Yes!! Go Nifty, go. Phones keep buzzing as fresh rounds of buying orders come in. Within an hour it is bustling with orders and words like teji and maal lav. However the overall mood is still cautious as investors are placing intraday orders with strict stop-loss levels and any profit, however small, is being pocketed in an attempt to wipe out earlier losses.

Moving on to another section, I decide to speak to some analysts. Rajesh, a fundamental analyst tells me: “This time more macro and global factors are at play and we are unsure how they will pan out. The lack of risk appetite leading to outflow of liquidity is a big problem. The threats of US slowing down and unwinding of yen carry trade looms large. Besides, the domestic interest rates are also rising.” Ha. This is pure expertspeak. But does it explain the losses?

Sandeep is more optimistic: “With the recent fall, much of the risk seems to be priced in. But for the lack of triggers right now markets don’t have a definite direction. Probably strong March results and the hope that inflation will soon moderate will push the upturn. So you can expect value-buying in select stocks for the long term. We see long-term value in cement, steel and banking stocks.”

On the other side of the room there were some chartists with their screens displaying graphs of daily stock prices plotted against dates. They belong to the esoteric camp of technical analysis. Ask them a simple question and you will be stumped: they speak in symbols not words. Sample: “The market is in an intermediate downtrend and the Nifty pulling back is actually a dead cat bounce”!! Anyway, these gentlemen are closely watching the 12300 mark on the Sensex and say that 11900 is a strong support. If these levels are broken then these may be the signs of the bull run reversing.

4.37 pm I decide to call it a day. Turning around to check the big TV screen I find the Nifty has climbed back to above 3770? Can I hear the bulls snorting?