Asian stock markets are trading mixed. Shares in China are higher today as the Shanghai Composite gains 0.4%, while the Nikkei 225 is trading down by 0.8%. Wall Street rose for the third time in four days on Thursday as the US Federal Reserve unleashed its latest program designed to buttress local governments and businesses crushed by moves to slow the coronavirus outbreak.
Back home, India share markets opened lower. The BSE Sensex is trading down by 166 points while the NSE Nifty is trading down by 45 points. The BSE Mid Cap index and BSE Small Cap index opened up by 0.3% and 0.5% respectively.
Except metal, telecom and healthcare sector, all sectoral indices are trading in red with realty stocks and automobiles stocks witnessing maximum selling pressure.
Note that, since the coronavirus outbreak, all BSE indices and NSE indices are down in the range of 25-35%.
Speaking of sectoral impact, in the article titled: Worst Hit Indian Sectors Amid Coronavirus Pandemic: 10 Points to Know, we dive deeper and look at how the impact has been on individual sectors...
Tanushree Banerjee believes the ongoing stock market correction could, in fact, be an inflection point for what she calls the irreversible Rebirth of India megatrends.
For bluechip stocks, she believes the time is ripe to begin buying some of the safest bluechips as there is safety in valuations and the market is offering them at deeper and deeper bargains.
The profits of bluechips (BSE 200 companies) are currently at a decade low as can be seen in the chart below.
A Rebound in Profits Overdue?
Tanushree is recommending her subscribers, to buy stocks selectively, a few at a time, by taking partial exposures to begin with.
She has already recommended 4 safe blue-chips in the past month and there are several more in her watchlist. You can access them here: Here's How You Could Trade the Coronavirus Crisis Safely
Moving on, gold prices are currently trading up by 0.8% at Rs 45,294.
The rupee is currently trading at 76.17 against the US$.
The rupee on Thursday recovered from record low levels to settle 6 paise higher at 76.28 against the US dollar tracking gains in equity markets and foreign fund inflows.
The local unit had settled at an all-time low of 76.34 against the greenback on Wednesday.
The rupee traded in a narrow range as gains in domestic equities supported the local unit amid lingering concerns over coronavirus outbreak in the country.
At the interbank foreign exchange market, the local currency opened higher at 76.11, but witnessed heavy volatility and slid to its all-time intra-day low of 76.55 against the American currency.
In another news, overseas investors have pulled out a net Rs 91 billion from the Indian markets in April so far as the Covid-19 crisis triggered a return to safe haven assets like gold and dollar-denominated securities.
According to the latest depositories data, foreign portfolio investors (FPI) withdrew a net sum of Rs 29.5 billion from equities and Rs 61.5 billion from the debt segment between April 1-9.
The total net outflow stood at Rs 91 billion.
In the previous month, FPIs had withdrawn a record amount of over Rs 1.1 trillion on a net basis from the Indian markets (both equity and debt).
During this holiday-truncated week (between April 6-10), with just three trading sessions, FPIs withdrew net assets worth US$457.5 million from the Indian markets. This was significantly lower than the net outflow of US$1.7 billion recorded in the previous week.
Emerging markets have been worst hit with foreign investors marching out from there to take shelter in safer investment avenues. India has been among the worst hit in the emerging market basket.
Enhanced volatility can be seen in both the markets with equity markets falling sharply and yields in the fixed income segment moving up significantly.
FPI investments in the equity category have been positive in the last two trading sessions of April and this can be explained by the sentiment in European markets changing on hopes that the virus is nearing its peak.
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