Markets At A Glance

 BY HARMAN SINGH SACHDEVA

The year 2021 started off with great optimism and phenomenal earnings expectations from India Inc. The heightened volatility in April along with weak results, have given the prudent Dalal Street a horrid flashback of March 2020.

Indian Equity Market will have to navigate through a lot of uncertainty in May, the rising COVID-19 cases and extension of lockdowns have compelled analysts to review their optimism and earnings expectations. While new retail investors may succumb to the negativity around, big institutional players remain sanguine on the prospects of  Indian Growth Story. Lockdowns can be corresponded to Abhimayu’s Chakravyuh in Mahabharata. It is easy to get in but nightmarish to get out. Production of India Inc. has been put to halt, this uncertainty is akin to a hanging sword over the heads of all traders and investors in the near term. 

This injury to India Inc. in the short term has given an opportunity to value investors to accumulate more financial assets. Benjamin Graham, Father of value investing has rightly said, “ The markets are like a pendulum that forever swings between unsustainable optimism(which makes stocks expensive) and justified pessimism(which makes them too cheap). The Intelligent Investor is a realist who sells to optimists and buys from pessimists.”

Potential silver linings in the short term could be an acceleration in the pace of vaccination and moderation in commodity prices, particularly oil. The latter can stabilise rupee and stem outflows foreign institutional investors.