Even as investors ponder about whether the sharp surge witnessed in the equity markets, which has pushed the Sensex almost 27 per cent higher from the lows it made on March 23, is a rally of the bears or the bulls, the Q4 2020 results are showing visible signs of damage in earnings for a lot of companies. This earnings’ season is just a precursor to the next earnings season where we can expect to see maximum damage caused due to the extended lockdowns. Meanwhile, one cannot waive off the possibility of the pandemic getting into a fresh phase and getting out of control, which may force the central and state governments to announce stricter measures.
And while the current rally could fizzle out easily and we may head lower towards the lows made on March 23, the bulls are hoping that even if the virus cases keep on increasing, the lockdown as seen in round one may not happen again. If it does, there is a chance that we may see a double-dip in the markets. For Q4 2020 it was expected that the earnings would be dampened to some extent due to the unprecedented crisis. Before the virus made its presence felt it was expected that corporate India would be delivering on its growth promises in Q4 2020.
The emergence of the outbreak forced the strictest lockdown in India which led to loss of business in the last week of March. However, amidst all the volatility and fire-fighting going on around the globe there is some good news on the earnings’ front for the bulls. Several analysts have continued to cut Asian companies’ 2020 earnings over a few months now but the downgrades have been the smallest in the last one month. This minimal downgrade, according to analysts, is because most economies have reopened after lockdowns stretching into several months.
This story is from the June 22 - July 05, 2020 edition of Dalal Street Investment Journal.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the June 22 - July 05, 2020 edition of Dalal Street Investment Journal.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
