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Right Time to Invest in Stock Markets After Recent Selloff? Here's What Experts Say

Representative Image.
(Reuters)

Representative Image. (Reuters)

Though it seems that bears have tightened their grip on the markets, most experts believe that investors should not panic and start deploying free cash in the market with a long-term perspective.

The Nifty 50 breached 8,800 levels for the first time since February 2017 on Friday, while the S&P BSE Sensex plunged more than 3,000 points to hit a 3-year low. Though it seems that bears have tightened their grip on the markets, most experts believe that investors should not panic and start deploying free cash in the market with a long-term perspective to reap big benefits. Here’s a look at what analysts are saying:

Ridham Desai, Morgan Stanley

Ridham Desai, head of India equity research and India equity strategist at Morgan Stanley, said that foreign institutional investors (FIIs) are facing redemptions, so they are selling. They are adjusting their portfolios and are selling what can be sold, he added. High quality stocks are falling and are getting hit the most because they are the ones that can be sold the most, noted Desai.

“Domestic investors have put a lot of cash to work; a month ago, they had a fairly high cash balance and even though the February flows were strong I suspect a lot of that cash is now into the market. What they are looking at is whether they need to make changes in their allocations to reflect the pricing and the fundamental environment,” Desai said in an interview with CNBC-TV18.

Nirmal Jain, IIFL

“This is classic capitulation playing out. This reaction is exaggerated,” Nirmal Jain, chairman at IIFL told CNBC-TV18. He added that it would be a good time to start investing if someone had cash to buy. “Markets will recover drastically when the fear of the epidemic peaks out.”

Vinay Pandit, IndiaNivesh

“Markets have seen a lower circuit for the first time after 2008. But equating this situation with 2008 is unfair. 2008 was a global financial meltdown whereas the 2020 correction due to concerns on account of coronavirus are overdone. Good quality stocks and frontline stocks have taken an undue beating and I am expecting a sharp bounce back,” Vinay Pandit, head - institutional equities, IndiaNivesh, told Moneycontrol.

“The worst news, I believe, on which markets have reacted so negatively i.e. WHO declaring it a pandemic has already come in. Cannot get worse except for number of deaths rising and the world coming to virtual standstill. I am looking forward to just one statement ‘we have found the cure’ – which will send markets into new zones, giving very little opportunity to buy into quality names at stress valuations,” he added.

Mark Mobius

Mark Mobius told CNBC-TV18: “Good time to begin accumulating stocks. Valuations are attractive now. In situations like this, recovery is usually very fast. People are selling emotionally, situation is that of panic.”