Equity To Remain Attractive Despite Challenges
Dalal Street Investment Journal|August 03 - 16, 2020
Even as the corona virus shock dictates how global economies perform in the near and medium term, it is fundamentally reshaping the investment landscape for global investors. There are accelerating structural trends in inequality, globalisation, sustainability and macroeconomic policies triggered by the virus shock. Amidst heightened uncertainty, strategic asset allocation becomes the most crucial investment decision. Yogesh Supekar discusses the outlook for the equities with the help of industry experts while Anthony Fernandes highlights the YTD performance of various global indices and asset classes
Yogesh Supekar
Equity To Remain Attractive Despite Challenges

The Sensex is up by almost 46 per cent from its corona virus-pushed market lows in March, 2020. This sudden, sharp and smooth recovery has not only surprised market participants but has also led to some confusion in their minds. Usually stock markets are leading indicators of economic reality and stock prices often reflect the optimism seen in businesses in real terms. But the stark contrast in stock prices and ground realities have pushed several market commentators to conclude that there is less or no correlation between stock prices and the economic realities – at least in the near term.

There is also a raging debate on whether the financial crisis of 2008 has done more damage or whether the virus-led disruption has led to larger disruptions in the market. The comparison, many believe, will help us understand how and by when will the global economies start operating at full capacities. Taken at face value it does look like the initial pandemic contraction is larger than the great financial crisis (GFC). However, the manner in which the policy response has been executed and the cumulative impact on the economy will likely be much less in the current crisis when compared to the GFC situation. The strong policy response will cushion the blow much better than it did during the financial crisis of 2008.

Denne historien er fra August 03 - 16, 2020-utgaven av Dalal Street Investment Journal.

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Denne historien er fra August 03 - 16, 2020-utgaven av Dalal Street Investment Journal.

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