Caution stock market investors! Avoid panic selling or buying of stocks amid high volatility

Caution stock market investors! Avoid panic selling or buying of stocks amid high volatility

Indian stock market benchmarks Sensex and Nifty have been reeling under pressure in the wake of the rising number of coronavirus (COVID-19) infected persons and deaths. Many countries including India, around the world have announced a lockdown in order to prevent the novel coronavirus. The 30-share index Sensex has tumbled 23 per cent so far in March while the broader Nifty50 index plunged 24 per cent from the opening levels of March 2. While Sensex and Nifty50 gained 8 per cent and 10 per cent, respectively, so far this week. Amid high volatility, investors need to be extremely cautious while making trading decisions and avoid any panic selling or buying of stocks, Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd told Surbhi Jain of Financial Express Online in an interview. Jyoti Roy further recommended investors to stick to quality stocks at this point of time.

Edited excerpts:

2. What should be investors’ strategy while trading in the market?We advise investors to be extremely cautious while making trading decisions during such volatility times and avoid any panic selling or buying of stocks. We recommend investors to stick to quality stocks at this point of time. We believe FMCG and select Pharma stocks will out-perform during these tough times and investors can look into gradually buying into these sectors.

3. Which sector seems to be well-positioned from a long-term investment perspective?We believe that the current correction would provide a great opportunity to buy into quality names in the consumption space and retail focused private sector banks. We believe that these sectors will be amongst the first to bounce back.

4. Which five stocks you believe will benefit from the Coronavirus outbreak?There has been a lot of panic selling at the market but there are few companies in the pharmaceutical market that are holding up well like IPCA Laboratories Ltd. To be honest, we don’t see any particular stock that is benefitting from this outbreak; however FMCG and healthcare companies will see relative out performance during these tough times.

5. What are the top sectors to watch and avoid amid volatility?The stock market has been going through an absolute turmoil as the COVID-19 pandemic has slowed down economic activities significantly. Every day the situation is rapidly changing and there is very little that we can say with certainty at this point. But investors can keep a close watch on stocks in the FMCG, pharmaceutical, retail focused private sector banks and specialty chemicals sectors considering the current scenario. Investors can look to gradually buy into these sectors on every dip.