oppn parties There Is No Silver Lining For The Stock Markets

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
oppn parties
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.