Weekends Are Nice

Only because stock markets are closed. The wild oscillation in indices is scary, exposing 'experts' who are reacting to romanticism and ignoring fundamentals

- RAJEEV NARAYAN

The Indian stock market has been on a wild ride over the last few months, perhaps a hangover from its over-indulgence and acute sensitization to all stimuli and impetuses, domestic or global. In recent weeks, share price movement has been erratic, with scrips swinging unpredictably and erratically in a kneejerk reaction to myriad events worldwide. Investor sentiment is being rocked like a mechanized see-saw on steroids, with geopolitical tensions and events triggering the switch and flagging off a roller-coaster ride.

The result? Extreme market crashes one day and unexpected surges the very next. Analysts and traders are scratching their heads, grappling with and trying to tame a new animal that is living on sentiment and belching out all fundamentals.

Let's look at examples. A senior minister or leader makes a statement, and our unpredictable and hyper-sensitive stock market gets into overdrive. The opposition cackles and criticises the leader, the market crashes. A bomb goes off in the Israel-Hamas standoff, the market crashes. Russia winks at Ukraine; the market blinks. Volodymyr Zelenskyy guffaws at Vladimir Putin's folly, stocks crash. Joe Biden passes yet another absurd statement, scrips panic. Trump eats an idli, the market crashes.

As stated above, sentiments are playing the market, with fundamentals being ignored. How else do you explain the massive surge in Hyundai Motors' newly-listed share on the very day that automakers announce disastrous sales? Or oil PSU stocks crashing just after global crude prices become better for their profitability? Or benefiting power firms tanking hours after the government announces policy sops for green energy? Or infrastructure shares zooming to highs after the government announces a breather in their PLI payouts?

It is all very perplexing. And unexplainable.