With 12 terror attacks rocking India?s financial capital in the past 15 years, market denizen reckon that this time too, bourses will take it on their strides and go on. Experts think there would definitely be a negative impact but it will be a short-term blip and the market will then be on its path to recovery. However, another section mentions that this time things could well be different.
Rashesh Shah, chairman of Edelweiss Securities says, ?The markets looks at the future and not what has happened.? He expects the markets to move when the shock has been absorbed. Sudip Bandyopadhyay, director and CEO of Reliance Money is rather optimistic and says, ?I am quite sure that markets will bounce-back on Friday. Though we have seen one of the worst terror attacks in recent times, but these attacks will not deter the India growth story. In the coming years India and China will have the positive growth, and after few month we will again witness fresh investment in India.?
However, there could be some heavy selling on Friday?s session and market experts expect the regulator to intervene, either by keeping the markets closed on Friday as well or bringing in curbs on short-selling. ?There has been a large short build up before the expiry of the November 27 contracts and the rise in the markets on Wednesday was an effect of the short covering,? says TS Harihar senior VP of ICICI Securities.
On Wednesday, the 30-share Sensex of Bombay Stock Exchange (BSE) rose 331.19 points or 3.81% and ended the day at 9,026.72 points. While the broader S&P CNX Nifty of National Stock Exchange (NSE) added 98.25 points or 3.70% to close the day at 2,752.25 points.
?We could definitely see some more shorts building up and some covers being devolved. Do expect the regulator to intervene if anything drastic happens,? Harihar adds. Dharmesh Mehta, head equities with Enam Securities also reckons that the market would take a dip as it had done on earlier occasions and then recover. ?New York also had blasts, and they also recovered,? he adds.
However, this time things could be different. First of all, this is unlike 2006 when the markets were looking so sanguine that any news would not deter optimism. This time around things are not the same. Moreover, this is new and dangerous face of terrorism and this will scare off people. Importantly, the terror attacks coming at a time when foreign investors have been heavy sellers in the Indian markets the attacks raised fears of a further blow to market confidence. ?Investors are being risk averse and this will add another point to their risk weightages and will certainly have a long-term impact on the markets,? says an analyst with an overseas investor.