The corona virus pandemic is escalating on a global scale. Investors are generically unsure about the damage that this is going to inflict on the companies. It is overall difficult to price the market.
The stock market is also going to be affected by the time that will be taken to contain Corona virus.
The market is close to its lowest time. Numerous financial advisors hence believe that this is the best time to go shopping for stocks. But an investor needs to understand that numerous sharp corrections have occurred in the markets during the past as well. In the future, the valuations may be further lower as compared to where they currently stand. Everyday intraday tips and nifty options tips by a knowledgeable advisor hence stand the best chance to ensure stock market success for an investor.
If we consider the Nifty valuations on a price book value basis, we come to see that they are at an 18-year low. This supports the belief that the market may have hit a bottom.
Economies and markets are nevertheless facing problems with regards to the COVID-19 outbreak. It may be true that the market may not have hit a bottom in the two months’ time. It may fall further.
Let us consider the developments that took place during the global financial crisis, which lasted from 2007 to 2009. This stands to render some insights over the current economic situation.
During the global financial crisis, corrections started in January 2008, but the stocks started recovering only in March 2009.
Another related incident is wherein the corrections that initiated in September 1994 lasted for 27 months. The government and its policies also play an important role in the recovery of the markets.
Corporate earnings will nevertheless be impacted. This will be due to not only the direct effects of the lockdown but also due to the second and the third-order effects.
Just as an example, the shortage of labour will impact the construction sector. Logistics will affect the earnings of FMCG companies. The trend will be visible in the second and third quarters of FY21.
At least for six months, businesses are going to be affected with primary, secondary and tertiary effects of the lockdown. Hence it may not be right to believe that the markets have hit a bottom as of now. Stock investment is lucrative at this point of time as well, even while the risk factors are slightly higher. Everyday intraday tips become even more important in the current scenario.
Another factor that should be taken into consideration in this regard is that the Indian stock markets are already underway with their correction. Nifty options tips work well for investors to define long and short term investments.
On 9th April 2020, Sensex has already surged by 1265 points. It is up by 20% from March lows. Another round of measures for domestic stimulus is expected. This will augur well for the economy, stock markets and investors.
During March, stock market lows had stood at 25638.9. The market is up by 21% from this figure. The Nifty50 index, on the same lines, has risen by 4% and has reclaimed its 9,100 levels.
It is not just the Indian markets, but the global markets as well that have been higher today. It is being anticipated that the coronavirus pandemic had reached its peak. As the governments go ahead with some additional stimulus measures, it will augur well for the stock markets as well, just as it augurs well for public health.
If we consider the sector-wise progress of the Indian stock markets, the automobile sector has been the biggest gainer. The nifty auto index has been up by 10%. Similarly, a strong buying action has been witnessed by Pharma and Banking sectors.
Numerous Sensex stocks have surged on 9th April 2020. They include M&M (17%), Titan (11%), Maruti (13%), Hero MotoCorp (10%), HDFC (9%), Bajaj Finance (9%), and Bajaj Auto (9%). Axis Bank, ICICI Bank, and Kotak Bank each advanced by 7%.
In these dynamic times in the stock markets, everyday intraday tips and nifty options tips by Shyam Advisory keep your money safe and growing.