Rakesh Somani got a call early in the morning on Saturday. The caller was the Kolkata-based broker’s friend and client. “He never used to pick calls before 10 o’ clock. But here he was checking on his portfolio early in the morning eager to know what action he should take,” said Somani, who runs Eureka Stock & Share Broking and is the president of the Association of National Exchanges Members of India (Anmi).
Stocks were on fire on Friday after it became clear the UPA government would survive despite the withdrawal of support by West Bengal chief minister Mamata Banerjee’s Trinamool Congress party. The benchmark Sensex closed at 18,752, a level it had not seen in 14 months.
Somani said the government’s recent moves and the way it defended them caught the attention of the small investor. “Somewhere the bell has rung. People are keen on taking action,” he added.
While brokers in Kolkata are secretly smiling at the defeat of their political leadership’s spirited opposition to economic reforms, their cousins in the west are grinning widely.
“Phones have started ringing again, probably (for the) first time in years,” said Harish Vasudevan of SVS Securities, a Mumbai-based broker. It is not just phones, even cash registers are ringing, say brokers. “We have seen a 50 per cent week-on-week spurt in our volumes in the last week itself,” said Kochi-based C J George, managing director, Geojit BNP Paribas Financial Services.
The rally so far has been driven largely by foreign institutional investors (FIIs). Domestic institutional investors (DIIs) have largely remained muted. While FIIs have brought close to $2 billion in September, mutual funds have remained net sellers at Rs 2,593 crore.
The Sensex ended on Tuesday’s trade with marginal gains of 21 points at 18,694 as the Street remained cautious ahead of the September futures and options expiry, due on Thursday. The 1,400-point rally has left some investors high and dry. “I think we have again missed the bus. The market has rallied sharply and I am afraid to invest at current levels. But I am being advised one can take short-to-medium term bets as the market could move up more on the back of global liquidity easing,” said Ranjana Acharekar, a Mumbai homemaker.