Arun Kejriwal will raise his pressed hands to his forehead tomorrow before lighting a lamp to welcome Lakshmi, the Hindu goddess of wealth, praying she'll deliver a recovery from India's record stock market rout.
The 51-year-old investor will then join traders and brokers making ceremonial purchases of equities during a one-hour, late- night session at the Bombay Stock Exchange. Determined by the new moon, so-called Muhurat trading, held every year on Diwali, the festival of lights, is considered the most auspicious time to start investments, and to put aside losses from the past year.
``I'm going to pray for sanity to prevail in the market,'' said Kejriwal, who says this is his worst year for investing in equities. ``Markets have gone mad.''
The centuries-old tradition of seeking blessings at Diwali has taken on added impetus this year after the destruction of $1.3 trillion in investor wealth, more than India's annual economic output. Indian stocks have outperformed in the month after Diwali, compared with the 30 days before the festival, in nine of the past 10 years, Fidelity International said in a report from London on Oct. 20.
``Though the market looks like a dark tunnel right now, we will see a ray of light at the end,'' said Ulhas Chitharia, a broker at Hasmukh Lalbhai Share Brokers Pvt. in Mumbai, who trades during the Diwali session every year.
Celestial Guidance
Seeking celestial guidance is commonplace among India's 800 million-strong Hindu community, which plans weddings, opens new businesses, and chooses children's names according to the position of the stars and planets.
Astrologer Bejan Daruwalla says he doesn't need charts or company earnings to tell him global stock markets will rebound next year. He's got Ganesha, the Hindu god of wisdom and the remover of obstacles, on his side.
Stocks will rally by April as the rest of this year will be depressed, Daruwalla predicts, citing the movement of planets. Jupiter, the sign for banks, will change position around February, and that's when markets battered by the global financial crisis will start to rebound, Daruwalla says.
``Markets will be as happy as a young bride in April,'' explains Daruwalla, 78, who writes newspaper columns on astrology and says the number of investors seeking his advice has risen by 25 percent since the market plunged.
For investor Niranjan Koradia, the rally can't come soon enough. The Sensitive index had its biggest fall in four years on Oct. 24 and is on course to post its worst annual decline, as the turmoil in credit markets spurs concern the global economy may slip into a recession.
`Wiped Out'
``I have been investing in the stock market for the past 50 years but never seen a day like this,'' said Koradia, staring at the ticker tape of share prices outside the Bombay Stock Exchange, Asia's oldest bourse. ``Whether I invested one, two or even five years back, the wealth has been wiped out.''
Investors say using the orbiting of planets round the sun to predict future stock-prices isn't a guarantee that the markets will align.
``I prepare astrology charts daily to guide me in my trading bets,'' says Kishore Shah, 66, who lost 7 million rupees ($140,000) in wrong-way wagers on derivatives this year.
Shah's betting the market will rally from a three-year low after Nov. 3, when the Sun aligns with Mars, as the current combination of Saturn and the red planet is inauspicious. ``That will be a very good time to buy stocks,'' Shah said.
Attractive Valuations
The Sensex's plunge this year, after doubling in the past two years, has made stocks in Asia's third-largest economy cheaper, 27-year-old Hardik Chheda said in Mumbai.
The price to earnings ratio, a measure used to value a company's shares in relation to its profits, for the 30 stocks on the benchmark has dropped to 8.83 from 31.16 in January, when the index hit a record, according to data compiled by Bloomberg.
``I don't know about the Diwali effect, but valuations have become too attractive to ignore,'' says Chheda, a six-year investor in the stock market who says he sold at the peak.
Mumbai-based investor Kejriwal said he will do his usual auspicious trades tomorrow and hope the gods will answer his prayers. ``We are very close to the bottom now,'' he said.
source
www.bloomberg.com
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