As stock markets across the world slide, most money managers and investors, in India and across the world, say there is no reason to panic. While some retain the optimism on corporate earnings and economic growth, others say the correction may go on for a bit longer. But a rebound is certainly in the offing, almost everyone agrees.
Asian equity markets recovered some of the losses sustained in the global rout after U.S. shares rallied amid a welter of calls to “buy the dip.”
A topsy-turvy session for the S&P 500 Index ended with technology, materials and consumer shares leading a 1.7 percent advance. The Cboe Volatility Index went through wild gyrations one day after more than doubling, though ended the session down almost 20 percent.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, snaps six-day losing streak and rose 1.2 percent to 10,626 as of 7:55 a.m.
Here's what market experts were saying after the sell-off
Ramesh Damani, Veteran Investor
The Indian stock market has not topped out yet and the ongoing selloff after the Finance Minister brought back the long-term capital gains tax on equities is a correction in a bull market, said veteran investor Ramesh Damani.
The global potpourri of events like possibility of rising interest rates, possibility of the Dow having topped off, that gives me pause that we have to weather this storm for a little bit longer. The good news is that the Indian economy is finally starting to do well. The third quarter results have been ahead of expectations of most analysts. There are green shoots in the economy. Lot of sectors are doing well. So, in terms of earnings, there is reason to be more optimistic about the market.Ramesh Damani, Veteran Investor
Tobias Levkovich, Citi
“The so-called Fear of Missing Out has shifted markedly to the Fear of Washing Out as the Dow Jones plunged more than 1500 points, reminding some observers of the ‘flash crash' of 2010. While Citi's Panic/Euphoria Model had begun warning of excessive ebullience back around Christmas last year, the rapid reaction of the past week may be overdone,” Tobias Levkovich, chief U.S. equity strategist at Citi told Bloomberg.
Drops of greater than 4 percent have a tendency to rebound but fundamentals may be needed to generate a pickup later this year.Tobias Levkovich, Chief U.S. Equity Strategist, Citi
Jonathan Garner, Morgan Stanley
Morgan Stanley's Jonathan Garner expects the market to correct another 5-10 percent.
We need to see a correction that is meaningful enough to establish, something like 5-10 percent upside to base. Particularly when you bear in mind the way some of the quantitative strategies, systematic strategies are beginning to unwind and how extreme the investor euphoria was going into this. I doubt very much that this is going to be a one or two day phenomenon. It suspect it will be more long lasting.Jonathan Garner, Managing Director and Head of Global Emerging Market Strategy, Morgan Stanley
Hiren Ved, Alchemy Capital
India is at the cusp of a recovery from the growth slowdown, according to Hiren Ved, director and chief investment officer at Alchemy Capital.
The markets are transitioning from PE (price-to-earnings multiple) expansion phase to an earnings growth phase, and I think this transition is likely to be painful in the short to medium-term and, therefore, you might see sharp corrections.Hiren Ved, Director & CIO, Alchemy Capital
Alchemy Capital will look at select stocks and is definitely a buyer at lower levels, he said. “We have some cash with us, and we are likely to deploy that.” He added the wealth management firm will consider stocks within consumer discretionary, autos, select private financials and technology sectors.
JPMorgan Chase & Co., Emmanuel Cau
“Global equities did not experience any material weakness for nearly two years, valuations have become stretched and technical, positioning and sentiment indicators all flashed red in recent weeks,” Emmanuel Cau, equity strategist at JPMorgan Chase told Bloomberg.
The unwinding of this extreme bullishness could have a bit more to go in the near term, but our view is that the medium term fundamental backdrop remains supportive and that one should indeed use the recent dip as buying opportunity. We think Eurozone and Japan offer the best risk reward, given their more attractive valuations and positive operating leverage.Emmanuel Cau, JPMorgan Chase
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