Tag Archive: Equity Market Panic

Sensex down to 36500 – Adversity or Opportunity?

With so many things happening around us; major political decision today on Kashmir, US-China trade war escalation again last-week, and corporate earnings showing no sign of revival, market is on a downward spiral since July-beginning.

Instead of asking, what should we do? Let’s look at from another viewpoint, i.e. seasoned player like Warren Buffet, what will he do in this kind of market?

  • Invest for Long Term – “Only buy something that you’d be perfectly happy to hold if the market shuts down for 10 years.”

This quote sums-up our investing philosophy perfectly; that all the long term investments usually are in equity, and short term (1-3 years) are in debt or liquid funds, which are not affected by market melt-down or swings. Do we need to worry?

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August 5, 2019 Market, 0 Read more >

Sensex down 2000 points

Since the budget announcement on 5th July, Indian stock market has had a downward run, leading to 2000 points drop in Sensex, from its peak.

How long this will continue?

Indian stocks are driven by two key parameters, i.e. FII money in-flow & Domestic growth numbers. Whether you call it a bad-luck, or chain of events; first with the recent budget announcement, FII growth or money in-flow has reversed in July-19. Almost 2billion USD, has been sucked out of the stock market, resulting in others (domestic investors) also getting into a panic of selling & adding to this pressure.

On the other hand, Domestic growth since last six months is under pressure, resulting in another bad quarter (Apr-May-June 19). Further adding fuel to the selling pressure, resulting in the stocks tumbling.

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July 29, 2019 Market, , , 0 Read more >

Equity Market Panic

Equity Market

Equity market reacted to two key events yesterday, with Sensex going down 1314 points intra-day or 3.5%.

  • There was a significant sell-off – starting with Yes Bank (down 29.5%) and then spreading to,
  • Dewan Housing (down 45%) and other NBFCs, banks and also the broader markets.

While Yes Bank corrected because of RBI’s denial of tenure extension to the CEO Mr. Rana Kapoor, the fall in shares of DHFL was driven by sale of the company’s debt by a mutual fund at higher yields.

What comes out is the fact that, in the broader markets, this was a knee jerk reaction and prices of most stocks should stabilize once the panic subsides.However, the sharp volatility witnessed, highlights the underlying fragility of the market.

It’s true that the selling was largely sentiment driven with no fundamental negatives in most stocks. However, the price action with almost no buying interest characterizes a market where risk appetite is low.

September 22, 2018 Market, , 0 Read more >