Ever since the COVID-19 pandemic has hit the world, the Indian market has been as volatile as it can be. Coronavirus effects have been brewing tension in many investors’ sentiments as a lot of their investments took a bigger dip than they were ready to see.
A risk-taking strategy ensures that one knows that there could be a dip like this. However, this was more unprecedented than any of us calculated it to be. With international turmoil adding to coronavirus effects, the stock market had been continually seeing a low or ended in the red.
The Indian market saw a bear market and a stock market crash with COVID-19, but slowly with the Indian economy opening up, it has made its way upwards on the graph.
Here’s how Sensex and Nifty have performed through-out the lockdown:
The upper end of the stock market remains to be capped with the increase in Coronavirus cases, more and more so every day in India.
March saw the biggest low and Nifty 50, after recovering these lows, remained in 8900-9500 but with gradual highs has finally crossed the 10,000 marks.
Banking sector is affected very badly as there is a lot of risk of NPAs.
Sensex saw one of the biggest dips towards the end of March but has managed to recover to over 34,000 mark as of 19th June 2020.
The relief package announced by the government is attractive for investors as it focuses on liquidity.
Make in India initiative being more powerful than ever, should help boost the economy with people buying more and more local goods.
Foreign Portfolio Investors or FPIs have been heavy selling, just like Domestic Institutional Investors (DIIs) in Mid-may caused a decline in equities, and is another one of the coronavirus effects to the stock market. This is after lesser restrictions came along the path in what was called ‘Lockdown 4.0’.
So far, the sectors that have helped the market not reach stagnation are the FMCG industry and pharmaceuticals. Goods like hand sanitizers, hand wash, masks, antiseptics, and in FMCG sector goods like: instant food, baking goods, and other food-related products have defied the coronavirus effects and the stock market crash due to COVID-19.
With ‘Unlock 1.0’, the market should see a rise in other industries too as alcohol shops open, movement of people in safe zones resume, and consumption of goods increases. The service sector is likely to see a more steep incline since social distancing norms are easier to maintain with that sector.
While the volatility of the market was concerning and continues to affect individuals and industries alike, there is a great likelihood for a bounce-back, as the market goes down, but also, surely, comes up. One has to ensure that they invest in the right stocks. Of course, the best way is to take the aid of a stock advisory company so that they can determine the best potential stocks for you, as per your goals, and as per your current budget.
The bear market seems daunting, but it is like a sale for the right investors. We wouldn’t recommend panic-selling stocks that you’ve catered to for a long period of time unless there is a very obvious reason to, as the likelihood of bounce-back remains. But other stocks that remain to be low and have a high potential for growth should definitely be bought, like a varied portfolio to increase the chances of doubling one’s investment.
Like many other recessions and economic depressions, this too shall pass, and while we are in the process of it, we can start building our portfolio like never before, as we also have a lot more time on our hands! Get in touch with the right stock market advisory company and they will be able to guide you through this seemingly difficult process.
Once you have identified the market trends and the foreseeable future becomes more stable and less volatile, you will be able to see these investments bloom instantly. Get in touch with us, to know more about the market, how to invest in the times of coronavirus and lockdown, and any other queries you may have. Simply mail to us email@example.com
Also Read: Impact of COVID -19 on Indian stock market