Thursday, 12 March 2020

Impact of Coronavirus on Indian Stock Markets

Global markets are reeling under the impact of Covid-19 and Indian markets are not an exception.
Between Jan 2020 and today (14: 30 hrs of 12-03-2020) NSE Indian Vix which measures the volatility of stock markets based on option prices has gone up by a whopping 220.85%.


Between Jan 2020 and today (14: 30 hrs of 12-03-2020) the broad based Nifty 50 has fallen by 20.05%. PSU Banks, Metals, PSEs, Energy are among the worst losers whereas Consumption, MNC, Pharma, IT and FMCG have shown some resilience.


One would expect large cap stocks to perform better than the mid cap and small cap but that is not the case. Nifty 50, Nifty Midcap 50 and Small Cap 50 all three indices lost close to 20%.

There is no where to hide at the moment. But every dark cloud has a silver lining. Many companies with good fundamentals are trading at attractive prices. Systematic periodic investments (averaging prices) with a holding period of at least two years can fetch good returns!

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