oppn parties There Is No Silver Lining For The Stock Markets

News Snippets

  • India's sovereign green bonds were oversubscribed four times as the RBI received 266 bids worth Rs 32892cr agaisnt the target of Rs 8000cr
  • Google tweaks its Android and India app store policy to allow manufacturers and users to choose certain things instead of compulsorily using Google apps after the CCI order and fine for unfairly dominating the market
  • Former US secretary of state calls former Indian external affairs minister Sushma Swaraj a "goofback" and a "hinterland political hack". MEA S Jaishankar slams him
  • Jamia screening of BBC documentary on Gujarat riots cancelled after the university was turned into a fortress and later 13 students were detained by the police
  • Supreme Court grants conditional interim bail for eight weeks to Lakhimpur Kheri accused Ashish Mishra. The bail can be further extended based on his conduct. He was asked to stay outside Delhi-NCR and UP and surrender his passport
  • After the JNU administration tried to thwart the students from screening the BBC documentary on the Gujarat riots and PM Modi, now students of Presidency and Jadavpur universities in Kolkata have decided to screen it 5 times next week
  • While a US research frim Hindenburg says its analysis found the Adani group overleveraged and claimed that its bubble will burst very soon and that sent the price of group companies crashing (Adani companies lost a combined Rs 55000cr), Adani group said the report was 'baseless' and 'malicious'
  • This time Enforcement Directorate arrests TMC spokesperson Saket Gokhale under PMLA for money laundering
  • Padma awards announced on Republic Day: Mulayam Singh Yadav, architect Balkrishna Doshi and ORS pioneer Dilip Mahalanobis get Padma Bibhushan posthumously, Padma Bhushan ius awarded to Kumar Mangalam Birla and 8 others and 91 get Padma Shri
  • Stocks fall big time on Wednesday on F&O expiry, finalncial and banks take big hit: Sensex tumbles 773 points to 60205 and Nifty 226 points to 17892 even as the market volatility meter shoots up by 8.51%
  • World Cup hockey: Germany stun England 4-3 to reach semifinals; Netherlands beat Korea 5-1 to enter last four
  • Australian Open: Sania Mirza and Rohan Bopanna reach the finals
  • Suryakumar Yadav is named ICC Cricketer of the Year 2022 and Renuka Singh gets the ICC Emerging Cricketer of the Year 2022 award
  • BCCI gets a whopping Rs 4670cr in the auctions for the 5 teams in WIPL or as it will be known now, WPL. Adani Sportline gets Ahmedabad for Rs 1289cr while Mumbai Indians get Mumbai for 913cr
  • Calcutta HC overturns the hookah bar ban in Kolkata by saying that it is not an illegal trade
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There Is No Silver Lining For The Stock Markets

By Ashwini Agarwal
First publised on 2020-03-18 20:40:47

Indian stock markets continued their downward slide in tandem with markets across the globe. On Wednesday, the Sensex fell by 1709 points while the Nifty was down by 498 points. Ever since Covid-19 was declared a pandemic, markets the world over have been in a freefall anticipating complete disruption of business activities and global recession due to the lockdown in many countries. The Indian economy was in the doldrums even before coronavirus struck and the market sentiment was bearish. But the pandemic has resulted in huge selling pressure as foreign investors have started liquidating their holdings and there is panic selling by small investors. Indian institutions have made purchases but the quantum and the frequency are declining rapidly.

In the last one month, Indian markets have eroded immense investor wealth. More than Rs 50 lakh crore of investor wealth has vanished and the market capitalization is at its lowest in three years. The worst thing is that there is no silver lining. After the Indian markets closed on Wednesday, there was a bloodbath in the US markets. The Dow Jones opened 1700 points lower. In percentage terms, the US markets shed between 5 to 7 percent in opening trades. The US administration has sought emergency funding of $850 billion to $1 trillion to fight coronavirus. Since Indian markets are sensitive to the happening in other world markets, there is likely to be another steep fall tomorrow.

Is the panic misplaced? Are markets overreacting to the situation? The answer is a firm no. There is no guarantee when the pandemic will be brought under control. It is surfacing at newer destinations every day. Europe is firmly in its grip. The Middle-East is showing signs of becoming badly infected. India has controlled it until now but experts warn that there might be many asymptomatic cases lurking in the alleys and can make the situation worse. Oil prices are also in freefall, breaching the $27 level today, suggesting that there is lesser demand due to pause in economic activity. The market has not bottomed out yet. Investors will be well advised to hold their horses and not trade based on unsolicited advice.