The recent mayhem in the global equity market is mostly attributed to corono virus . Nifty corrected about 25% with a massive sell off in few trading sessions . Many financial listed firms especially banks may see a further hit in their stock prices because the business cycle may take a standstill . The fall of nifty from about 12200 to 8900 is quite steep in the last few years . The obvious comparison of these steep fall would be the year 2008.
But the crash of 2008 and that of 2020 are entirely different . 2008 was all about banks , funding and very concentrated risks . On the other hand , the crash of 2020 is all sudden resulting in halt of a number of businesses . Also there was a severe liquidity crisis back in 2008 . But during this crisis , the reverse holds true. There is ample of liquidity in the current scenario . Recently , fed announced to cut the interest rates to zero in the usa.
The global stock market would not recover easily . The aviation industry is severely impacted by the corona . Entertainment and tourism industry may also see a massive dip in their sales. This will have contagion effect on other industries and effect the economy negatively . This will result in weaker financial and economic data points in coming weeks. Hence giving more strength to bears. Probably overall trends indicate that nifty is likely to stay in the range of 10000 - 8000 in coming weeks. Until vaccines come for corona and market regain the confidence .
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