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Here’s a look at the top experts’ take:
ALL IS BAD
Marc Faber, Author of Gloom, Boom & Doom Report
If Indian stocks, the blue chips I am talking about, are selling at 40-50 price-to-earnings ratios, I think the market has a significant downside risk, given that the coronavirus is destroying the entire conference industry, the entire travel industry, business travel, the hospitality industry. For a while, nobody is going to travel. So I am telling you India is as vulnerable, if not more, than other markets.
Abhishek Goenka, Founder & CEO, IFA Global
India had been immune to major stock market crash relatively due to huge index buying, but lately, it has been crashing too touching lows of 11300 today. It may follow as per their international peers if the scare on coronavirus continues. There is a sense of huge risk aversion across global markets and the signs are clearly visible in 10 year US bond yields and Japanese yen too.
THERE’S OPPORTUNITY HERE!
Hiren Ved, CIO, Alchemy Capital Management
I would buy the fall but I would take my own sweet time to accumulate because when you have an event like this, where the outcome is relatively uncertain, you are not very sure whether you will see an immediate snapback. My sense is that the markets will give you enough time to buy but certainly, as a money manager I would use this opportunity to buy but I would not hurry. I would go in slowly and steadily.
Ravi Dharamshi, CIO, ValueQuest Investment Advisors
I hold the view that relatively India should fall less compared with global markets. We have less leveraged positions and also the macros are turning around in our favour with crude falling and interest rates being low. Some amount of supply chain disruption in China is likely to benefit India in the medium to long term, so that should relatively hold us in the good stead.
Umesh Mehta, Head of Research, Samco Securities
From extreme calmness to extreme pessimism, D-Street is also a victim of the virus outbreak in other countries. This pandemic led to indices across the globe to witness a sharp fall this week. However, when the entire world is blaming coronavirus for the fall, we feel that valuations have a big part to play in this bearishness. Indian bourses have been trading around higher valuations and hence a correction was needed to align the markets as per the mean reversion theory. This week’s fall is a valuation play with coronavirus as the scapegoat. Investors should not burn their hands by selling in this fall. Rather, they should slowly and steadily pick reasonably valued quality stocks in a SIP format as every dip becomes a good buying opportunity.
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