FPIs could relook at countries which introduce credible stimulus programmes, says Deepak Jasani, head of retail research at HDFC Securities

The impact of the virus spread is too early to be measured and react to, although everyone agrees that the impact on growth, consumption, earnings will be large and may take quite some time for recovery.It may be hard to estimate the impact the lockdown will have on economic growth and financials of companies, but both the government and RBI’s stimulus packages will support market sentiment. In an interview with FE, Deepak Jasani, head of retail research at HDFC Securities, says FPIs could relook at countries that introduce credible stimulus packages. Edited excerpts:

Sensex rises over 500 points; Nifty above 8,450

Markets are down about 36% since their peak. How far are we from the bottom?
It is a difficult call at this point. While the so-far known negatives seem to be discounted at the low of 7,511, we are still in the dark about the future ramifications of the coronavirus globally and in India. The impact of the virus spread is too early to be measured and react to, although everyone agrees that the impact on growth, consumption, earnings will be large and may take quite some time for recovery. The second and third order effect of the virus may still not be easy to identify and discount.How will RBI policy impact markets, and will this ease stress on financials?

Mahabharat returns on DD after 32 years: Here are some interesting facts about the iconic show

Markets had anyway risen ahead of the actual announcement, anticipating most of these measures. Some disappointment arose as the moratorium of term loans is not automatic, it seems banks have to be approached for this. Also, working capital loan repayment has not be postponed (only the interest portion has been deferred). Businessmen would have expected a blanket moratorium on all repayments and some relief in terms of interest rate to be borne by the government. Though financials have got some temporary relief, they would be worried about how soon the demand for credit would revive, how deep will the damage be to the business models of borrowers and whether slippage would shoot up once the moratorium period ends.

Be the first to comment

Leave a Reply

Your email address will not be published.


*