Panic Selling & the Retail Investors... No end in sight!!!

As I told in the last article, it is the retail investors who are going to be affected the most in a panic selling and a market crash. It became true the next 2 days itself after my article. I am not saying that I am always cent percent in the predictions and analysis. It is really a shock across the world particularly for the optimists of the street.

Markets across the world and particularly Indian bourses have come off the lows of Jan 22 - 23, but still clearly pessimism rules the world now. It is clearly evident from the fact that market has not seen a consistent rally, but swinging between the lows and highs daily. Pessimist analysts are very confident that the worst is not yet over. They might also be true as the recent trends are supporting them.

Indian market supposedly is believed to be in an upside movement atleast till Budget'08. The trend after that clearly is not known even to the king makers and badshahs of the street. The most affected lot in the current turmoil - retail investors, some of those supposedly lose over 5 lakhs in those 2 days are very well expceting a good run to cover up the losses. But it is imminent that they need to wait for some more years, yes years, to cover up those losses in those 2 days.

Adding to the Indian secondary markets' woes is the uncertainty in the primary markets. Last week has seen the withdrawal of 2 major IPOs, Emaar MGF and Wockhardt Hospitals, even after the reduction in price band and the extension period of the issue. This adds to the uncertainty in the minds of those who already are very much upset.

Are we really going towards a recession. With respect to Indian economy, the answer may be a clear no for the near term. But some of the recent estimates show that the Indian GDP is slowing down though not to worrying levels. It is evident from the past that a recession in US will have impact on India after some weeks. The gap might well have reduced now, but not the impact. Sub prime and credit crunch in the US will show see their real face during April-May and well India may also follow the path and we would well be in our 2 - 3 year lows during that time.

As most of the experts say, this recession wont extend beyond a period of at the most nine months, the worrying fact is to find out its starting point and its peak.

Already some of the Indian hotspot cities including Bangalore are said to be stagnant and dull in property prices. Also Q3 numbers of some of the believed-to-be-good companies have shown a slowdown in earnings.

All together, consensus are strong for hard times ahead to crack, particularly for already butchered retail investors. Yes... they have to fish in a bumpy market atleast for the next 2 quarters.