What Lies Ahead For The Indian Stock Market?

There could be more volatility going ahead; keep calm and be disciplined

- Lokeshwarri SK

The past couple of weeks would have brought most equity investors to the edge of their seats as the bottom suddenly seemed to have fallen off stock prices.

Friday’s session would have been especially nerve-wracking for most.

Many investors made the most of the crash, and bought shares on Friday. There would have been others who were frozen into inaction by the mind-numbing decline in Indian and global indices in the early part of last week. There could be a few who are sure that this is not the bottom and are waiting for stocks to plumb new lows before entering the market.

Which of these investors are right? The answer — no one really knows. So, instead of trying to be smart and earning some boasting rights for having invested at the exact low, take a disciplined approach to investing, for that is what will help you sail through this patch.

The background

It is well-known that the COVID-19 pandemic, which has affected more than 13.6 lakh people so far and claimed at least 5,077 fatalities in 123 countries, up to March 14, has caused much concern in society at large.

India, with 81 cases and two deaths so far, has not been spared.

While China, where the virus originated, has been reporting fewer number of cases every day, the epicentre of the infection has now shifted to Europe with countries such as Italy (15,113), Germany (3,062) and France (2,860) reporting an exponential increase in the number of cases.

The US, too, is reporting a sharp rise in new cases.

As countries took measures to stop the contagion — by clamping down on travelling, restricting public movement and shutting down public places — the panic has been spreading to the stock markets as well.

Indian markets were further roiled by the crude oil crash due to the price war between Saudi Arabia and Russia, and the Yes Bank crisis.