Stock market cocks a snook at Covid-19 fears; Anil Singhvi says vaccine, liquidity, US stimulus hopes boosting stocks
There are two main reasons behind this, the Market Guru said - one is the hope around the vaccine and the likelihood of it coming to the market. The markets are not seeing a 2-3 month period, rather looking way ahead, he further said
The problem around the Covid-19 pandemic is refusing to die down as the US reported more than 2 lakh cases in just one day. Even in India, the rampaging virus is showing no signs of slowing with many states declaring curfews or other forms of lockdowns. How should the investors see this? Will there be a material impact of this on the stock markets or are there other booster shots, so to speak, on the horizon that market participants are eyeing? Zee Business Managing Editor Anil Singhvi decodes the issue for the channel viewers.
The correlation between the stock markets and coronavirus vaccine existed initially, especially in March when it all began, the Market Guru opined. At present, it doesn’t appear that any correlation exists as the markets and the infections are moving simultaneously.
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In the current wave, around 2 lakh cases were reported in a single day in the US. During the last wave, the fresh cases that were reported were high, Singhvi said.
Even in India, the cases have been on the rise forcing state governments to declare night curfews and lockdowns. The markets are not reacting despite the news around state borders getting sealed.
It will not be correct to do one-to-one correlation between the markets and the pandemic. The reasons for market correction can come on any day.
Why Stock Markets are not reacting to pandemic situation?
There are two main reasons behind this, the Market Guru said – one is the hope around the vaccine and the likelihood of it coming to the market. The markets are not seeing a 2-3 month period, rather looking way ahead, he further said.
Another important aspect is the liquidity condition. Markets need money and if the cases continue to rise the way are doing now, the likelihood of a US stimulus package increases. that is available in abundance. This is what is lifting the markets.
There is ample liquidity in the markets now and people have made enough money.
This month has proved to be historically the biggest month with Foreign Institutional Investors (FIIs) pumping in over Rs 46,000 cr and this month is still not over.
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These three things are holding the markets together, he further said.
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