A Week of Swift Ups and Downs

Wednesday’s market session unfolded with the abruptness of a surprise guest at a party, catching the traders off-guard with prices tumbling a staggering 500 points from their highs. The velocity of the descent left day traders reeling, short positions obliterated, and those clutching on to their positions pondering their next move. While the 1.41 per cent drop might seem nondescript, the breadth of the fall, with Small-Cap and Mid-Cap indices plummeting about 3.5 per cent, sent shivers down the spines of market participants. The indiscriminate nature of the downturn spared no sector, inflicting widespread pain due to the broad distribution of holdings. 

Thursday, however, saw the market stage a swift recovery, reminiscent of a famous dialogue from the popular movie ‘Pushpa’: “Mein Jhukega Nahi’ (I won’t bow down). The bulls on D-Street mirrored this sentiment, refusing to capitulate in the face of adversity. Two major developments seized the spotlight, commanding investors’ attention. First, the surge in cases of the new corona virus variant JN.1 set everyone’s nerves on edge. Second, the Reserve Bank of India (RBI) dropped a regulatory bombshell: Non-Banking Financial Companies (NBFCs) were barred from employing alternative investment funds (AIFs) to ‘evergreen’ their loans.