Posted at 5:39 PM , on March 20, 2020
The week was manic for the stock markets in more ways than one. Nifty and Sensex corrected almost 28% from peak levels before bouncing back from the lower circuit. In the melee, one must not forget the silver lining in the cloud.
Big global crash
The week saw the crash assuming huge proportions. Not just the Indian market but even other indices like the DJIA, NASDAQ, FTSE, CAC, DAX, and Nikkei lost anywhere between 20-30% in less than a month. Clearly, this big global crash was led by the virus pandemic. Even as the WHO issued a warning, the panic reactions like travel ban are only making the crash worse. The global crash has also been led by concerns over valuations. With US indices giving 31% returns in 2019 with hardly any GDP growth, valuations were a worry!
Posted at 11:07 AM , on January 27, 2020
The markets started off on a somber note during the week with the Sensex losing nearly 820 points in the first 3 days. The fall was significant for two reasons. Firstly, such sharp falls are not seen in the midst of a pre-budget rally. Secondly, the fall in Sensex happened with a sharp spike in the VIX. Here is what actually drove the indices lower.
A worrying quarter
The results are coming in thick and fast and there were some real concerns in a number of heavyweights. HDFC bank and Kotak Bank reported larger than expected NPAs. TCS had growth issues and RIL saw GRMs and petchem margin falling. Of course, there were smaller banks like RBL which saw a sharp fall in profits but the macro worry appears to be that the consumption slowdown is beginning to hit the private banks. Now PSU banks will be closely watched. Continue reading
Posted at 2:16 PM , on December 14, 2015
As the Sensex and the Nifty gyrate to the tunes of market triggers like quarterly earnings, RBI guidance and the Fed moves, it is time to sit back and ask a simple question. Do equities actually give the best returns among asset classes in the long term? When spoken about in a global context, the experience may not always bear out. For example, during the last 20 year period, bonds and index funds have actually given as much returns as smart equities. In countries like India, real estate in many states has substantially outperformed equities, although that market is less liquid and organized compared to equities. Then, gold during its frenzied phases like 1971-1979 or 2009-2011 have managed to outperform equity as an asset class. In the Indian context, there is a strong case why equities will actually outperform other asset classes over the long term.