Corona Virus (Covid19) Impact on the Indian Stock Market


Can the Coronavirus lock down the Indian economy indefinitely?

It is true that stock prices are falling in the global marketplace, not just in India. In most countries, the average stock price fall is 25% to 30%. In India, the Sensex fell from 42,000 in January to less than 32,000 three months later. A few weeks back, the New York Stock exchange stopped trading on multiple occasions, and had its biggest single-day fall ever. Globally, stock exchanges are seeing a fall of 2000 to 3000 points daily. For people who put up considerable capital in stocks, they are on the verge of losing it all. For smaller investors, it’s a death, knell.

When WHO declared a pandemic, stock exchanges and financial markets, along with other markets like commodities, real estate, crude oil, bullion and others saw their finances pummel. The current Covid-19 pandemic can be said to be a Black Swan event, as its impact is deeper than can be detected at the moment.
The battle against Coronavirus

Financial wisdom tells us those who swim against the tide during adversity come out stronger. The same can be said to be true right now. Some say that instead of selling stocks now, they should consolidate and save up, and even buy stocks since many stocks are becoming dirt cheap. However, it is not without its risks as well. While only the fewest investors right now continue to buy stocks, it should be remembered only the fittest survive. The stock market is no different. One good news is that while stocks can prove to be volatile at times like these, the underlying businesses can prove to be stronger. Those with more financial backing can still be stable.
How are investors behaving?

It is still hard to predict which way the markets are going to end up. During times of panic, investors tend to make emotional decisions. For instance, many are in a mood to sell. They are selling off their stocks before prices fall even more. Maybe it is good for the long term, or bad. Only time will tell. However, those who make thoughtful decisions will surely come out on top during such times.

If you want to ride the tide, here are things you can do.

Remain calm, and take calculated decisions. Do this for the next three to six months. Buy and hold those precious stocks you have, even if prices are going down. If these are precious enough, it’ll be worthwhile to have these. When prices rebound, only you will win.

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