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Share market may go more downwards

Share markets on Friday opened in negative zone as investors remain worried about the economic impact and uncertainty over the novel coronavirus pandemic.

At around 9:35 am, BSE Sensex was trading 407.81 points or 1.44 per cent lower at 27,857.50, while NSE Nifty was down 110.70 points at 8,143.10 points. Bank and financial stocks suffered as volatility remains high in the domestic markets.

Some of the top losers in early trade are Kotak Mahindra Bank, Induslnd Bank, IDFC Bank, ICICI Bank, HDFC Bank, Hero MotoCorp and Asian Paints.

On the NSE, all sectoral indexes were trading in red except Nifty Pharma, highlighting a marked weakness in most sectors.

Analysts say that the stock markets in India could see choppy trade till there is clarity on the situation after the lockdown ends of April 14.

While markets were closed on account on Ram Navami on Thursday, factory activity data released yesterday also weighed in on the markets today. On Wednesday, Sensex had fallen over 1,200 points while Nifty plunged over 340 points.

Globally, stocks rose on expectations of a possible oil deal between Saudi Arabia and Russia, but doubts are already rising over the deal brokered by US President Donald Trump.

Market could go into recession and Nifty may touch 6,500 in next 6 months but now the parameters show that the economy may enter into depression period (where GDP turns into negative territory, means it could be in between -1 percent and -5 percent) and the period could be quite long in comparison to slowdown/recession period.

It may be 2 years or more and in this period, Nifty is likely to touch 5,500 and the stocks are likely to be available at 10-50 percent (depends upon small cap-large cap) discount from their peak.

The good thing is the reason of recession would be coronavirus. However, depression territory would be due to an extreme drop in crude oil prices (likely to touch $12–15 per barrel) and there is again a chance of an acceleration of the US-China trade war. Probably, it would not convert into great depression (where multiple economies deliver drop in GDP by 15-20 percent) because tailspin crude oil prices affect many major economies but at the same time, it would be positive for emerging nations. So, be cautious, try to keep more patience and be ready to invest in lower levels.

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