Nifty 50 Hit Lower Circuit Today. What Next? Experts Weigh In

Panic caused by the Covid-19 pandemic continued to grip Indian share markets today as benchmark indices tumbled 10 percent in early session to hit the lower circuit, triggering a trading halt for the first time since May 2009.

The Securities And Exchange Board of India said the regulator along with the stock exchanges are prepared to take suitable action as may be required.

BloombergQuint spoke to some market experts to assess their take on this situation. Here's what they had to say:

‘Classic Capitulation'

Nirmal Jain, founder and chairman at IIFL Group, foresees the current situation as a classic capitulation. “Problem with markets today is that bulk volumes have happened due to programmed trade,” he said, adding that he can't predict the bottom or top, but the risk-reward ratio today directs towards buying. Jain suggested building the portfolio with blue-chip stocks as good quality companies are available at cheaper prices.

• India will outdo the rest of emerging markets once the situation settles.
• Lower commodity prices will benefit India.
• One should look at sectors like chemicals and gas distribution.
• See less impact on earnings for India relative to other countries.

‘Opportunities Like These Come Once In A While'

Sudip Bandyopadhyay, group chairman at Inditrade JRG Group, considers this a buying opportunity which comes once in a while. This is a good time to invest from a long-term perspective, he said.

• Don't go all out but start nibbling in.
• Stick to high-quality names and be careful and selective.
• Look at companies that will benefit from the supply chain diversification.
• Likes chemicals and pharma sector.

Also Read: Sensex, Nifty Post Worst Weekly Loss Since 2008

‘Valuation And Sentiment Directs Towards Buying'

Ridham Desai, head of India Equity Research and India Equity Strategist at Morgan Stanley, recommended buying at this point. “Don't go all in but time to put in some money,” he said. Valuation and sentiment tells me to buy, as good businesses are available at cheaper prices, he said.

‘Extent Of Damage Is Not Gaugeable'

Markets have reacted due to a lot of algo-driven orders placed globally and due to the massive passivisation in the industry, said Manish Sonthalia, associate director and chief investment officer (portfolio management services) at Motilal Oswal Asset Management Company Ltd.

The extent of damage in this scenario is not “gaugeable”, he said.

• Buyback is very much in the offing, expect many companies announcing it.
• Best way to mitigate the risk is to stay unleveraged.
• Its prudent to go with the financial sector with high Tier-I capital.
• Consumption and pharma sector is on the radar, avoid commodities and metals.
• Good opportunity to load stocks as see money making opportunity in the months to come.