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March 27, 2020

Be immune to market viruses, stay for the long haul

That would iron out volatility triggered by disruptions such as the Covid 19 pandemic

The rapid spread of the novel coronavirus (Covid 19) across the globe has got investors worried about the impact on the financial markets, especially equities. In such a situation, the question on the minds of investors is whether to stay invested or exit.

 

Equity markets in turmoil as the virus spreads

 

Equity indices worldwide, including India, had a tumultuous 2020. The Dow Jones and FTSE 100 indices tanked ~26% and 25% respectively, while emerging market indices RTS (Russia) and Bovespa (Brazil) plunged 35% and 37%, respectively, on year-to-date (YTD) basis till March 25, 2020.

 

The story was no different back home with the Indian benchmark indices (S&P BSE Sensex and Nifty 50) down 31% and 32%, YTD. In fact, trailing the manic global sell-off, benchmark indices saw their biggest one-day point’s fall with the S&P BSE Sensex down 3935 points and the Nifty 50 declining 1135 points on March 23, 2020 giving a massive jolt to investors’ confidence