Reference Auto

Fears that the US debt woes along with the European crisis could snowball into a full-fledged slowdown hasn’t died down with there being a buzz that the current crisis could be even worse than the 2008 global meltdown and this has led to the benchmark index, the Sensex, of the Bombay Stock Exchange plunging 292.84 points (1.8 per cent) to close at 15,848.83 points last Friday.

The stock markets have been under a bear grip and, with last Friday’s figures, this has been the fifth weekly drop in a row for the benchmark Sensex.

The National Stock Exchange’s 50-share Nifty also fell almost 2 per cent during weekly trade to close at 4,747.8 points last Friday.

The bourses have not only remained subdued but also highly volatile, especially last week, when the 30-scrip benchmark Sensex gained more than 2 per cent in the first two days of trading. But in the remaining part of the week, the Sensex headed south.

Like any bear market, the stock markets also witnessed intense selling pressure. Only three scrips among the Sensex stocks ended on a positive note.

They include Hero MotoCorp, which saw a rise of 2.7 per cent at Rs 1,952.45, Mahindra, up 1.2 per cent at Rs 704.65 and Infosys, which went up 0.68 per cent to Rs 2,204.55.

Among the big losers from the Sensex pack were Jaiprakash Associates, down 7.58 per cent at Rs 54.90, DLF, which slid 5.76 per cent to Rs 175.85, Tata Steel, which tanked 4.77 per cent at Rs 422.25, and RIL, which fell 4.61 per cent to Rs 719.50.

Bucking the trend somewhat, other bourses in Asia witnessed mixed fortunes. The Japanese Nikkei ended 0.29 per cent higher at 8,797.78 points, while Hong Kong’s Hang Seng closed 0.86 per cent lower at 19,582.88 points.

The Chinese Shanghai Composite index also fell 0.12 per cent to 2,612.19 points.

However, the American bourses got a boost from its apex bank with Federal Reserve chairman Ben Bernanke saying regulators would provide economic stimulus in case it is needed to bring the US on the growth path again.

The Dow Jones Industrial Average ended 1.21 per cent higher at 11,284.50 points and the S&P 500 index went up 1.51 per cent to close at 1,176.80 points on Friday.

The European crisis continued to take a toll on the region’s bourses with the French CAC 40 falling 1.01 per cent to 3,087.64 points. The German DAX slid 0.84 per cent to 5,537.48 points and the UK’s FTSE 100 closed a tad lower at 5,129.92 points.

With stock markets on a bear grip, it is time to pick some attractive scrips. But those doing so will need to have sound knowledge of the markets. Picking stocks now (at rock-bottom rates) can provide very attractive returns in the middle to long term (three to five years).

Alternatively, the Central Bank of India has launched a fixed deposit or FD scheme which offers to double your money in seven and half years.

The scheme, known as Cent Double, will give an annualised return of 13.33 per cent and is open from September 1 to December 31.

For senior citizens, the annualised return is a tad higher at 14.93 per cent where the money will double in seven years and three months.

In metro cities and urban areas, the minimum deposit is Rs 10,000 while the minimum deposit for customers in rural and semi-urban areas is Rs 5,000.

With this move, Central Bank has becomes a trendsetter, and in another few months, many banks may follow suit with various attractive (and similar) schemes.

So, in the bear market, investors who want to play it safe can opt for fixed deposits now, which could offer around 13 per cent interest for investors in the short to medium term, which is highly attractive as well as safe compared with stocks.