While Indian share market swung wildly between gains and losses on Friday morning, investors were left wondering whether to treat the freefall as a yard sale or to stay away from the virus-infected equities.
While Indian share market swung wildly between gains and losses on Friday morning, investors were left wondering whether to treat the freefall as a yard sale or to stay away from the virus-infected equities. As investors scratch heads, stock market veteran Raamdeo Agrawal advises people against trying to catch the bottom. Trying to figure out if the markets have bottomed out or not is a ‘fool’s game’, Raamdeo Agrawal, Managing Director of Motilal Oswal Financial Services said, but at the same time, did not advise investors to stay away from the market. “Markets are like a coil, you can suppress it all you want but when it comes back it will come back strong,” Raamdeo Agrawal said in an interview with CNBC TV18.
Claiming that it is a good time to shop for value stocks, he said, “It is the time to go shopping as good value mid-cap stocks are now available at low valuation. Their prices are close to what they were during 2005-2008.” Agrawal also pointed out by way of an example that if the hospitality stocks are facing a beating on the street right now, those are sure to jump soon and won’t stay down forever.
Trading was stopped for 45-minutes on Friday morning after NSE Nifty-50 hit the lower circuit dropping down 10 per cent, and S&P BSE Sensex tanked more than 3,000 points. Share market surged after trading resumed, S&P BSE Sensex was up 1,500 points from yesterday’s closing, while the broader NSE Nifty-50 gained 400 points in the afternoon trade. Before the trading was halted, investors lost Rs 12 lakh crore wealth in terms of market capitalisation of BSE-listed firms.
Agrawal, who in his conference call last week had compared Coronavirus to 9/11, said that investors should look at 2022 earnings estimates of companies while they invest and ditch the advice of analysts. “Don’t bother what your analyst says, even he might not know what happens in the next few months,” said Agrawal. In his conference call, Agrawal has said that the fear among consumers of Coronavirus needs to max out for markets to perform better. Agrawal said that the fear among consumers affects their spending habits which affects earnings of companies and further takes a toll on how investors behave in the market.