History is testimony whenever markets have seen such deep cuts, they have always bounced back strongly and rewarded investors handsomely. Of course, to be able to pocket those gains, one has to stay put in an investment. The investor's dilemma here is, those who want to buy in this market would already have been either fully invested or lost capital and have no money left. And those who have the money do not dare to venture out. At the end of the day, it's the people who go against the wind will go home smiling.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded some 125 points higher at 7am (IST), signalling a possible rebound on Dalal Street. Elsewhere in Asia, markets turned choppy while US stock futures stepped back after a solid bounce overnight, as concerns about the widening coronavirus epidemic weighed on sentiment.
Read More  | MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 per cent while Japan's Nikkei gained 1.9 per cent. Hang Seng slipped 0.67 per cent, while China's Shanghai Composite index traded 0.69 per cent higher. |
| US stocks witnessed a bounce overnight. Dow finished 1,048 points, or 5.20 per cent, higher at 21,237, while the S&P500 gained 143.06 points, or 6.00 per cent, and the Nasdaq 430 points, or 6.23 per cent |
| Oil prices rebounded in Asian trade this morning from heavy losses, as major economies indicated they were ready to launch more stimulus measures to tackle the fallout from the coronavirus pandemic. US benchmark WTI crude gained 0.5 per cent to $27 a barrel, while international benchmark Brent rose 0.9 per cent to $29. |
| The rupee pared its initial gains to settle marginally lower at 74.28 against the US dollar on Tuesday amid continued meltdown in equity markets and sustained foreign fund outflows. |
| WHO'S |  |
MARKET IN RISKY ZONE… A sharp fall in the stock market over the past few weeks may have made the prices of several stocks look attractive, thus tempting investors to make fresh purchases. But this may prove to be risky. Data over the past 20 years show that a double-digit fall from the peak in market indices within a month often results in a prolonged weakness contrary to investors' expectations of a turnaround. The current fall, which has resulted in 28% drop in the benchmark indices at the end of Tuesday's session from the peak on January 20, is a part of a global selloff due to the uncertain economic growth amid the outbreak of Covid-19.
Read More FPIS RUN FOR SAFETY… High yields or affordable valuations are not an attraction in the times of fear. Foreign funds have sold a record Rs 66,600 crore worth of stocks and bonds so far in March, the highest ever monthly net sales, as they flee to safe haven assets amid a forecast of freeze in global economic activity. The benchmark stock index is down almost a quarter since its February peak and yield differentials are at multi-year highs, but that has still not convinced investors to pick up Indian financial assets as they fear flight to safe havens.
Read More SHADOW BANK PAIN… NBFCs, which were seeing some signs of recovery after a tough last fiscal, could see a fresh round of funding squeeze on increasing risk aversion among investors in the aftermath of the unprecedented write-off of Yes Bank's Additional Tier 1 bonds. Analysts say recovery for these companies could be delayed further and the cost of funds could stay elevated for the time being, although NBFCs themselves believe that a likely interest rate cut by RBI and pressure on banks to transmit lower rates could help reduce costs.
Read More | LOOK WHO'S |  |
PROMOTERS GO SHOPPING… Promoters of several Indian companies have raised stakes in their firms amid the recent selloff by lapping up beaten down shares in the market. Many of these promoters may have used the dividends their companies paid them of late to buy shares. In the last one month, promoters of nearly 197 domestic companies have increased their stake by buying from the open market through stock exchanges.
Read More EQUITY CHEAPER NOW… A sharp fall in the stock market over the past two weeks has made equities cheaper relative to bonds. An analysis of the earnings yield of the benchmark Nifty 50 and the 10-year bond yield shows Nifty 50's earnings yield — the inverse of the price-earnings multiple — has increased by 131 basis points over the bond yield for the first time since May 2009 against last 15 years' average of 92 basis points. Nearly one-third of the BSE 500 stocks (excluding financials) are having earnings yield of more than 400 basis points.
Read More YES BANK NPA HUNT… Yes Bank's new management has set itself a target of recovering Rs 10,000 crore in bad loans and hopes to contain fresh bad loans at 5% of total loans as it charts a new course under a bunch of shareholders led by SBI. The bank, although prepared for a surge in withdrawal, believes it may not be unmanageable given that even during the moratorium just one-third of the people with more than Rs 50,000 in deposits pulled out the funds, its chief executive said.
Read More Meanwhile... RECESSION IS HERE… Goldman Sachs Group and Morgan Stanley economists joined the rush on Wall Street to declare the coronavirus has triggered a global recession, with the debate now focusing on how deep it will be and long it will last. A day after President Donald Trump conceded the US slump alone is set to be "a bad one," economists threw away their forecasts that the world could avoid tumbling into recession for the first time since the financial crisis.
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