The story of the mayhem in the Indian stock market, currently in the grip of a global pandemic of covid-19. The average fall in each is within the 25-30 percent range. The same mentioned in the graph as Sensex, which fell from a peak of 42,000 points this January 17 to below 30,000 in three months and Nifty witnessed from 12000 to below 7000 points. The Indian Stock Market after the rise of covid-19 has steeply fallen.
After WHO declared COVID-19 a pandemic, the financial markets, as well as other asset categories such as real estate, commodities, crude oil, and bullion, it is the rare, completely unexpected. As more Western nations, and others like India, declare economic shutdowns and travel restrictions, the worst may still be in the future. The short-term disruptions are likely to be severe.
Due to COVID-19 situation:
• RBI has reduced the timing of debt as well as the currency market in light of the lockdown amid the coronavirus outbreak. Currently,
• Money market trades timings from 9 am to 5 pm.
After a severely beaten stock, most investors are following the ‘buy-on-dips’ strategy but, they are forgetting that companies that have performed in the past are not necessarily going to emerge winners post this pandemic. It is extremely essential to analyze the impact of lockdowns and restrictions in trade on businesses before buying them. Since there is uncertainty in how long the lockdown will last or if it will be extended, it is too early to assess the gravity of the crisis.
Identify attractive sectors:
To identify the right stocks for long term investment as fundamental of the company have to be stronger which decides the future growth in deciding its return potential. Companies who use the raw material to benefit from low crude prices, thus, helping them improve their margins. The reason being Global easing and low crude oil prices are expected to help RBI see-through transient inflation. All these combinations make Indian equity markets relatively better off, compared to its global peers and sectors like private banking, autos, consumer staple & discretionary consumption plays, specialty chemicals, etc. are expected to report quicker recovery. RBI is expected to ease policy rates in an upcoming bi-monthly meet in the first week of April 20.
5 points should consider before buying stocks:
- Management
- Growth Prospects
- Valuations
- De-leveraged companies
- Technological Driven Businesses
Large & Mid Cap Stocks
52 Week/1Yr High – Jan 2020 data
52 Week/1 Yr Low- Mar 2020 data
Current Market Price (CMP) – Apr 2020 data
These are some of the **stocks in the large-cap in different sectors, For e.g; if X would have bought 1L worth of shares of Reliance Ind. at 52 week low, he would have earned 40.46% of profit means 40k in few days.
Conclusion
Rule of thumb in asset allocation states that individuals should hold a percentage of stocks equal to 100 minus their age. So, for a typical 60-year-old, 40% of the portfolio should be equities. The rest would comprise of high-grade bonds, government debt, and other relatively safe assets. As a famous monologue says Investments are subject to market risk please read the documents carefully. Indian Market Indices since inception have always surged within a year from the depression whether it’s global or domestic.
Disclaimer: The views and investment tips expressed are personal views. I advise users to check with certified experts before taking any investment decisions.
**Stocks shown in this article are for example only. A lot of exceptions are considered.
