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Bloodbath on Dalal Street

Aravamuthan Sasikant

Look at any corner of Dalal Street and you will see blood sprinkled around and people with grim faces. "Day traders have lost all the money they made over the last six months in the last week alone, and many suffered further losses today," says a day trader.

The current meltdown is not discriminatory at all: it is not restricted to old economy stocks alone. Even the more sought-after new economy stocks were hammered during the last week. Frontline information technology and entertainment stocks have fallen by more than 15 per cent from last Monday's close.

Zee Telefilms closed at Rs 1,547 last Monday, but ended today's trade at Rs 1,220 levels -- a fall of 20 per cent in just five trading sessions. Even Saturday's news of its inclusion in the Sensex did not do the stock any good. It ended the day lower by Rs 30 over Friday's close.

Satyam Computer lost more than 15 per cent in the last five trading sessions to languish at Rs 5,810. Despite the announcement that it would be included in the Sensex, it ended the day in negative territory.

Again, it was the day traders and small investors who bore the brunt, says an analyst. "Traders and small investors jumped onto the Zee Telefilms and Satyam Computer bandwagon on the news of their inclusion in the Sensex, and by the end of the day they were in for a rude shock."

Himachal Futuristic lost more than 20 per cent in just four trading sessions to close at Rs 1913 today, even after the news of Kerry Packer's Consolidated Press Holdings or CPH picking up a 10 per cent stake in the company. The case is similar for stocks like Silverline Industries which has dropped more than 25 per cent to Rs 933 in just five straight trading sessions.

Even the mighty Infosys Technologies was not spared by the bears: it lost around 16 per cent to close at Rs 10,764. Digital Equipment, once the darling of the market, is also out of favour -- it has dropped a whopping 25 per cent in the last five trading sessions to Rs 909. HCL Infosystems, yet another infotech stock, also suffered. It is down a whopping 28 per cent to Rs 630. Imagine the plight of investors who got into these stocks just last Monday. Their portfolio would be down by 28 per cent in just a week.

Old economy stocks, which are not as volatile as infotech stocks, have also been battered. Reliance Industries, which had risen sharply earlier, dropped by 22 per cent to Rs 203 levels. Tisco and Telco both dropped 12 per cent. Larsen & Toubro fell 22 per cent to Rs 252.30, and Siemens was down 24 per cent to Rs 308.20 during the same period.

The last five trading days have been a nightmare for, both, retail and big-time traders. Few have taken a short position and made money in the correction. As usual, it is the small investor who has lost a lot of money, says a broker as he will not be able to fork out the necessary margin difference.

The confidence of many day traders and small investors has been shattered by this bloodbath in the new economy stocks, says a trader.

However, there seems to be some optimism. Operators see a ray of hope and expect the market to turn for the better by Wednesday.

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