Sensex @ 10K: up in 483 days, down in 193


K.S. Badri Narayanan

Chennai, Oct. 17 Though the Bombay Stock Exchange's benchmark index, Sensex, took 20 years to scale 10,000, the journey from 10K to 20K was undertaken in record time. It took 483 trading sessions for the benchmark to move from 10,000 to 20,000; but when the reversal happened, the Sensex crashed from 20,873.33 (closing high registered on February 7, 2008) to 9,975.35 in just 193 days.

Slogans such as "India Shining", "India Growing", "foreign investors showing confidence in India", "emerging countries are going to be world leaders" accompanied the sharp surge in stock prices as the benchmark crossed one milestone after another. These cheers gave way to the more circumspect "technical reasons are behind the market's decline", "FIIs are pulling out of India", "India growth story is intact," and so on.

Investors' Woes

The sharp decline since the beginning of this year has dragged more than 60 per cent of the stocks listed on the National Stock Exchange almost 75 per cent below their January peaks.

"The unprecedented and the most undesirable event eventually materialised as the Sensex hit new lows of sub-10,000 levels. It has been a journey of utmost despair and dismay for investors with the Sensex collapsing over 50 per cent from its highs in a matter of just 9 months. However, this carnage has to be looked at as not an India-specific issue but an issue that has clouded equities as an asset class," said Mr Hitesh Agarwal, Head of Research, Angel Broking.

Loss Realisation

A dealer with Mumbai-based listed brokerage house said: "The beauty of the bear market is that one only realises that he or she is in bear market after losing the entire trading capital."

"While it would be difficult to catch the bottom of the markets, we would like to re-iterate that investors should continue investing into equities in a systematic manner. The current situation would take some time to mend. If history is any guide to investments, equities have outperformed all asset classes over the long term and we remain confident that history will repeat itself," added Mr Agarwal.