Market analysts say that the coronavirus fears are short term in nature hence its impact may remain for a quarter after that markets will rebound
Domestic equity benchmarks Sensex and Nifty crashed in Friday’s trading session following a rout in the global equity markets. Overnight on Wall Street, all three benchmarks Dow Jones Industrial, S&P 500 and Nasdaq plunged over 4 per cent in the trading. Around 1 PM, Sensex was trading 1194 points or 3 per cent lower at 38,550; while broader Nifty 50 index slipped below crucial 11,300 level to trade at 11,254. Amid this extreme weakness in the domestic markets, analysts see buying opportunity at the current levels. However, investors are advised to buy in tranches and not put all the money in one go, as more volatility is expected in the coming days.
Coronavirus fears short-term in nature
Market analysts say that the coronavirus fears are short term in nature hence its impact may remain for a quarter after that markets will rebound. “Add on the good stocks which have been performing throughout the year. So, it is a good time to invest at least 25 per cent or one-fourth of their cash and then accumulate. Selling is more of a knee-jerk reaction to the overall global negatives and in the last few days, we have witnessed heavy FII selling which is a sign of short term reaction. Domestic investors should definitely make use of this short term opportunities because long term fundamentals are intact. Anyone who has a long term goal should definitely take this opportunity and start building positions in good stocks,” Narendra Solanki, AVP- Equity Research, Anand Rathi Shares and Stock Brokers said.
Buying opportunity for investors
Despite seeing the buying opportunity in the markets at the current level, investors should not put all their money in the markets. “Put your money in tranches seeing the current scenario in the markets. This is definitely a buying opportunity for the investors,” Ajay Bodke, CEO, portfolio management services at Prabhudas Lilladher, said.
Markets are expected to remain very volatile in the coming days. “From a technical perspective, I don’t see any further downside. Investors should not put everything in one go. Some downside momentum might persist. For the immediate short-term, investors should start putting in some 20-30 per cent of their investment fund at current levels and must watch where market stabilises,” technical analyst Milan Vaishnav said.