oppn parties There Is No Silver Lining For The Stock Markets

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  • Congress Working committee asks Rahul Gandhi to take up the position of Leader of Opposition in Lok Sabha. Gandhi says he will consider the request
  • RBI governor Shaktikanta Das said that gold was shifted to India as the quantum of RBI gold abroad had increased due to recent purchases
  • Delhi HC rules that submitting photographic evidence of adultery will not be enough, they will have to be proved as authentic in the age of deepfakes
  • A four-member panel will review NEET-UG results of 1563 candidates to check if they were given extra marks for exam time loss
  • Mamata Banerjee says her party will not join Modi's oath-taking ceremony. Also says INDIA bloc might stake claim to form government later
  • K C Tyagi of the JD(U) dropped a bombshell when he said that Nitish Kumar was offered the post of prime minister for switching sides. Opposition leaders rubbished the claim
  • This May was India's hottest month in 36 years says IMD
  • T20 WC: India take on Pakistan today. Telecast to begin at 8pm IST
  • T20 WC: Afghanistan stun New Zealand and Bangladesh win against Sri Lanka
  • T20 World Cup: Australia beat England by 36 runs. This spoils England's chances of making the playoffs as they have lost both their matches till now
  • Heat wave continues in the country as monsoon moves slow
G7 commits to promote India-Europe corridor
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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.