The markets plummeted by 800 points yesterday and the mood out here in the office is slightly on the heavier side. Most of our clients will loose out on good money thanks to the new FDI investment rules by the honorable FM that may cap the limit for foreign investors and also because of the proposed hike in the tax to be paid by them. The big picture is green all right but at some level the concern for the small man over rides all these investment strategies for multi-million dollar enterprises.
34,000 Cr of market cap got washed off yesterday due to the bears finally taking the much awaited plunge. It’s a natural phenomenon and this was bound to happen but going by the age old adage in markets – every penny made by X is a penny lost by Y. The proportion of “middle class small investor” in the X category is roof high this time.
The worst hit by the fall is the small man, people who have invested in blue chip mutual funds that promised 100% returns. Most were about to cash out because the academic season is about to start and most of them need money to pay their kids fees. Most of them have lost around 10-15% of the expected amount. Tough luck some say. Irresponsibility is what I feel.
This free fall still shows how sentiment driven our market is. Till yesterday we boasted how technical based our market has become and that now fundamentals will be the basis on which we will invest but one ambiguous signal and there is panic across the board. And the fall right after Reliance IPO opening makes it murkier.
“Differentiated Responsibility” is necessary when dealing with the wealth of a few million middle class employees. Bull’s and Bears will run the show and it’s the pigs like “the small investors” who get butchered time and again, but let it not be because of an idiotic lapse of our own elected government. When the powers to be can be so responsible towards huge multinational conglomerates, why not have a common minimum responsibility towards our own people.
Life is tough, definitely. And that’s the way it should be. But progress and development must make it that little easy. Just a little bit. There should be a small cushion that allows the populace to get on with their lives, without the one extra worry due to the polity that they have chosen. It’s not Herculean and the people in power know it, its just execution in spirit and that’s where we have been stumbling for the last 50yrs and we still are right now.