Stock markets have been in a tailspin. Some, including those in India, saw steep falls never seen before, worse than the 2008 financial crisis. After the sharpest-ever drop on March 12, the Sensex breached the 26,000-mark on March 23. As investors try to adjust to the new normal, portfolios have been bleeding red. So, should they sit on the fence or dive in? Founder of Abakkus Asset Manager, Sunil Singhania believes it is time to embrace volatility by spreading out investments and buying in tranches. In this exclusive interview with Outlook Business, the market veteran discusses how deep the wound runs, time needed for the market to recover and where investors could take cover to benefit from the crash.
Can the current volatility be compared to previous market crashes?
This is an once-in-a-lifetime event. We have never seen a complete lockdown in our lives. People are scared and there is uncertainty with respect to how this virus is spreading. We haven’t ever seen this kind of volatility in the market. The intensity and speed of the fall have surpassed all instances over the past century. US and Indian markets fell by 30% in a matter of days, not even months.
Do you think the market has bottomed out or is the recent surge a relief rally?
In the near term, the volatile movement of the market is a reflection of panic. News flow related to coronavirus, both positive and negative; technical factors; and demand and supply are triggering the moves. We moved h