We have entered the recession

"We have entered recession" said IMF chief on Friday. After 2008-2009, the world is into another recession and it is going to be worst than previous. The global economy is badly affected by Covid-19 pandemic. IMF estimated economy recovery would be in a year's time. But I feel we can think of such estimates only after we find a solution for Corona.

The United States of America turned out to be the most affected country after China and Italy with thousands of positive corona cases every day. After USA and europian countries, the Indian government announced a locked out period for 21 days to fight against corona virus.

The major section of the Indian population including daily wage workers, street shop vendors and farmers will be heavily affected by this lockdown. Though the government announced 1.7 Lakhs Crore worth package for the affected people, I doubt whether that would be sufficient.

This is going to be a tough time for the Indians since many factories, offices, malls, and shops are closed for the lockdown period. It will affect the production, transportation, and consumption of products which will lead to financial loss for people, companies and governments.

Last week Nifty 50 crashed to 7500 range and recovered back to 8660. Maruti Suzuki stocks fell down to ₹4645 (-234) on Friday dragging the Auto Nifty to lower levels. Most of the auto stocks look so cheaper now. With Corona around, not sure when they will bounce back.

Is stock market going nowhere?

As expected the Indian stock market went down to a very low-level last week. On 18th March Nifty 50 went to 7800 levels and recovered back. On Friday Nifty 50 ended on green side at 8745 (+482). But based on the market trending, I have a doubt in my mind, Is it going nowhere?

After the YES bank crisis, both public and private banking stocks are struggling badly. There is a fear among investors in investing in private banks. Karur Vysya Bank (KVB) was one of the best performing private bank stock until last year (~₹92 in Jan 2019). now it crashed down to ₹27. Not sure where it is heading to.

Last week, the US stock market slipped further and ended at 6879. What seems to be more bothering is even commodities are in the red zone. Crude oil futures are below ₹2000 per barrel. But the petrol price is not going below ₹70. Surprisingly the gold price went down last week. 

Still we did not get any way to control the Corona virus spread. It is turning out as the worst nightmare in our days. Already some of the experts claim that it has done enough damage to the global economy like a world war. Day by day it is growing stronger and expanding its arms worldwide.

Since most of us are stuck at home due to the Corona virus. The most affected sections of people are daily wage workers and street shop vendors. The government should support them financially in this tough time.

Investors are confused about investing their money as they could see only red everywhere.

Record break on Stock Market?

What happened last week in stock market was historic. But unfortunately not in a positive sense.
Not just Indian stock market, worldwide stock market indices went down as much as they could.
On Friday pre-opening session, Sensex and Nifty went to a very low level and exchange had to stop the trading and give break for some time.

Friday Nifty 50 went down to 8555(1000 down comparing to previous day close) and after the break it recovered back to the previous day level and surprisingly it went ahead and ended on green side at 9955 (+365).

But I am not feeling positive about market as it is too much volatile. Though Indian and US stock market ended in green side on Friday, unless we find a clue to control the Corona virus it is going to eat up investors money.

Initially I thought economy would require 6 months to recover once we find a way to control Corona virus. But day by day things are getting worse in global economy due to Corona spread which will increase the number of days to recover as well.

Anyway some big fishes i.e large cap stocks are in 30% to 40% cheaper price now. Those who waited for a long time for this cheaper price ranges can buy those stocks with some hope of economy recovery. But please keep some money to buy in dips because stock market may fall further.

March 1st week has ended with YES bank crisis

In general, March used to be a good month for Indian stock market. Unfortunately this year it has started badly with Sensex sliding down further. On Friday Sensex ended with 37576 (-893) and Nifty 50 on 10989 (-279). Nifty 50 breaking 11000 mark is not a good sign for the market.

Market was volatile last week, it had some good moments in between the week but Friday it went down with YES bank crisis. On Friday,YES bank shares opened with ₹33.20 and crashed to ₹5.55. But recovered back to ₹16.2 as RBI took over the control of YES bank. Central govt and RBI assured depositors for money and bank's restructure.

A private sector bank crisis is not a good news for the depositors as well as investors. With a slowdown in Indian Economy, These kind of incidents will make situation worse as Nifty Bank index was down 1013(3.52%) on Friday.

Corona virus has spread further with more than 1 lakh+ people of positive cases and 3000+ deaths. It has affected global economy further as many events/meets are getting cancelled across the world which is affecting aviation and tourism sectors.

See the corona virus count map by The New York Times for update.
https://www.nytimes.com/interactive/2020/world/coronavirus-maps.html

Impact of Corona Virus on Indian Stock Market

Indian stock markets went way down last week (Feb 4th week) with Sensex on 38297 and Nifty 50 on 11201, a worst week since 2009. The China which contributes 28 percentage of manufacturing in world is heavily affected by corona virus which leads to slowdown in supply chain and sales all over the world.

In Indian markets, investors were selling their stocks across the sectors on Friday which lead to Sensex ending with 3.64% down and Nifty with 3.71% down. Though it looks like good time to buy some technically strong stocks, investors should wait and watch in the coming week as there is chance for the stock markets to go down further.

Considering an example from my portfolio, Tata Motors which is a top stock in my portfolio is crashed to ₹128 from ₹201.7 (on Jan 15) sounds like a good deal to buy now. But JLR sales may go down due to Corona virus spread worldwide. we need to check the Feb 2020 sales of Tata Motors before taking any decision.

Those who are holding good stocks can buy few shares and average their buying price. But still until we get clear picture on Corona virus, the global stock markets will be volatile.This leads to a increase in gold price which is already sticking around ₹4000 per gram.