oppn parties There Is No Silver Lining For The Stock Markets

News Snippets

  • University vice-chancellors in West Bengal decide not to hold final-year examinations despite UGC prod, will instead go by the state government advised 80-20 formula where 80% will be marked on performance in past semesters and 20% on internal assessments in the final semester
  • The Centre wants the ITI and other top Indian firms to bid for 5G as Chinese firms Huawei and ZTE are not likely to be allowed to participate
  • India and China agree on total disengagement to return to peace ahead of the next round of military talks
  • The Supreme Court allows delivery of summons and notices via WhatsApp and email, but questions remain on proof of actual receipt
  • National Investigation Agency says the proceeds from the Kerala gold smuggling case could have been used for terrorist activities
  • Four Maoists shot dead in Valmiki Tiger Reserve in Bihar
  • Despite localized lockdown, Covid cases continue to rise at an alarming rate in West Bengal. Newer areas brought under containment zones in Kolkata
  • ICSE, ISC results declared, Average scores in the English paper, 20% lower this year than the average in most years, pulls down the aggregate for most candidates
  • IIP contracts by 35% in May. Manufacturing goes down by 39.3%
  • Row erupts over CBSE's decision to reduce the syllabus by 30% this academic year due to the disruption caused by the pandemic. Experts say several lessons that the ruling dispensation does not like are being removed
  • Gangster Vikas Dubey's nephew killed in an encounter by UP police who also pick up his key aide Raju Khullar and his son Adarsh
  • MHA sets up an inter-ministerial committee to probe the alleged financial misdeeds of three trusts linked to the Gandhi family
  • Actor Jagdeep, most famous for his Soorma Bhopali act in Sholay, passes away
  • Pakistan says Kulbhushan Jadhav has declined to file a review petition and will stick to his mercy plea. India calls it a farce
  • India to keep a strict vigil to confirm that the Chinese are abiding by the deal on the pullback at the LAC
The plot thickens in Rajasthan. Sachin Pilot removed as deputy chief minister and PCC chief. His loyalists dropped as ministers.
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.