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Depressed investors haunted by one query: When will mayhem end?

Where is the Indian equity market headed and when will the current mayhem end? This is the
question an estimated 20 million investors in the country were asking Sunday as they nervously
hoped for solutions to tackle the global financial meltdown that has pulled Indian equities down over
16 percent last week and tripped industrial growth to its lowest in a decade.

'I sincerely hope the government is able to address the concern fast,' said V. Srinivasan, who retired
from a private sector company in Chennai, lost money in the recent market crash, but declines to
quantify the amount.

'Those who have entered the market at the 14,000-mark and above will find it difficult to recover
from their losses for next one year,' he added.

As the financial tsunami continued over the week, the 30-share benchmark sensitive index of the
Bombay Stock Exchange (BSE), the Sensex, finished the week's trading Friday at 10,527.85 points,
down 1,998.47 points or 15.95 percent from its close the previous Friday at 12,526.32 points.

Credit rating agency Crisil estimates Indian stockholders have seen investment of over Rs.2.3 trillion
being wiped off in September, while another estimate has the top 10 Indian companies by market
capitalisation losing Rs.1.23 trillion in the last week alone.

People in India are beginning to realise that the financial upheaval globally will not pass the country
by, says Jagannadham Thunuguntla, head of the capital markets arm of India's fourth largest share
brokerage firm, the Delhi-based SMC Group.

'Detroit's Big-three (General Motors or GM, Chrysler, Ford) are in trouble. Reports say GM and Ford
are heading for bankruptcy, and GM and Chrysler are talking merger. The auto sector drives the
economy, companies like these and Citigroup, if they are in trouble, it spells trouble for us,' he

Reflecting on the mayhem, a pensive Srinivasan said: 'Some people are losing their life

Added R. Raghunathan, a Chennai-based retired employee: 'Value erosion in my portfolio is around

Rs.200,000, 50 percent of the total investment.'

'I had invested the money my wife brought when she took voluntary retirement from an insurance
company. The stocks in which I have invested in are NTPC, Power Grid, Reliance Power, Ranbaxy
and JP Associates. All these scrips are now down,' said Raghunathan, who took up a stock-broking
job for some time after retirement.

According to a senior finance ministry official who requested anonymity, the government will likely
propose fiscal measures to tide over the current turmoil in the financial markets.

'There is a suggestion to cut the CRR (the cash reserve ratio or the minimum balance against
deposits a bank has to keep as cash) by another 50 basis points to seven percent. It will moderate
the call money rate, which is otherwise so volatile,' the official told IANS.
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The call money rate - rate banks pay for borrowing from each other overnight to meet temporary
shortages of funds - soared to 24 percent Friday; this was around five-seven percent lately.

'The repo rate reduction is another key line of defence, which we have not yet used,' a senior
functionary in the Reserve Bank of India (RBI) said over phone from Mumbai, while confirming that a
further CRR cut was also being debated.

These are some indications that seem to have enthused Chennai's Raghunathan, who said: 'I am
not bothered as the prices are likely to go up in five years,' he said.

Yet, others are worried. 'The market situation is erratic, there is a continuous chaos going on in the
money market,' said Bijay Murmuria, Director Sumedha Fiscal Services and President of
Association of National Exchanges Members of India (ANMI) told IANS.

'The situation is such that people are afraid of investing. Anything can happen. Even if they have
liquidity they will put the amount in banks for fixed deposits, from where they can get fixed interest
rates rather than investing in the stock market,' the Kolkata-based stockbroker added.

For good reasons too, it seems. Says Amitabh Chakraborty, president of Equities Religare: 'The
Sensex is headed towards the 9,000-point mark. It will be maybe two years before there is an
upswing. Investors should foreclose debt like housing loans, avoid real estate and capital goods
stock, and invest in FMCG scrips and gold.'

Anik Basu ( © IANS / India eNews)

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© Copyright 2008 All Rights Reserved.