A Safe Haven Market?

The Indian stock market is defying gravity and traversing uncharted territory as it scales new peaks. If all goes well, it seems as if it is just getting started

- Clifford Alvares

IT SEEMED LIKE THE USUAL. He was quite the regular there, coming most late evenings – and sometimes staying into the wee hours. The resto-bar was the same, with the chatter of excited voices inside and the blaring traffic outside drowned out by the thumping music, lights playing on the decorated walls, and the bar all a-glitter, sparkling with bottles of brands, some wellknown, some rare.

But things weren’t the same. He was a familiar face to the staff, most of whom he knew by face, if not by name, as well as to the other regulars. But they noticed something different. He wasn’t his normal exuberant self. “Perhaps he’s in his cups,” suggested one. “And perhaps he’s going through a mid-life crisis,” voiced another. “Nah,” prophesied a third. “He’s in the midst of a mid-cap trauma.”

That last certainly said much. For many of the past few years, he had advocated to all and sundry (those who would listen) that mid-caps were the game to play in the market. Quaffing peg after peg, he expatiated on why large-caps were passé. But look at him now. He needed to shed much more than a dollop of weight, and not only on his rotund figure, but also in his hefty portfolio, bellyfull with mid-caps (cups). The largecaps, having stolen a march in the markets, he was left gasping, in the lurch holding a basket of goodies that seared like the amber liquid glinting in his glass and swirling down his throat.

He had to switch strategy. But was he too late. Was he too “mid”-heavy to make the requisite shift to large-caps which, having consolidated while the mid-caps were partying, were now racing ahead, drawing the rest eagerly behind.

It is a sign that the times, they are a-changing. The stock market’s euphoria is clearly visible in many parts, reflecting an economy that is driven by a new reforms process.