Stock markets all over the world were very volatile in last few week due to the Covid-19 Novel Corona Pandemic and our markets too followed the trend. Nifty touched a recent low on 23rd March 2020 and recovered strongly from that point. Here is the chart of nifty stocks which gained most during this recovery period.
Pharma stocks were mostly gained due to the recent medicine issue with USA and as India emerged as a major medicine exporter for many medications believed to be useful for Corona virus. Cipla zoomed 52.6% during the period and other pharma companies like Sun Pharma and Dr Reddy gained 30% or more. Other major gainers are Reliance Industries, Axis Bank, Britannia, Nestle, Zeel, Maruti, Mahindra, Hinduinlvr, BPCL, Bajaj Auto, UPL, Vedanta, Infratel, Hero Motors, Grasim, Icici Bank, Hindalco, Infy etc and were gained more than 20%.
But be careful since still there is no end to current problem as more corona cases are reporting from many parts of India so still we cannot say it is fully under control. Markets always reacts very fast so dont jump but slowly invest as not many stocks are at very attractive valuations. Most of the business activities in India are stopped for more than 3 week and it seems like the lock down get extended for some more time and it is going to seriously affect companies. Main thing is same situations exists all over the world so it may take a long time to get back to previous levels. So if you are a medium to long term investor it is better to sit with some cash too so that if markets comes down further you can purchase good quality stocks much cheaper rates.
Since covid-19 is a fast spreading pandemic it may disappear also fast than we think. If we study history there are two types of pandemics – fast spreading which spreads fast and comes down quickly and slow spreading and last for a long time. It seems like Covid-19 is fast spreading so we can hope it will disappear soon. In that case markets may not revisit the recent bottoms so sitting idle also may be a mistake. So slowly invest that is the best strategy you can take at this time. Also remember most of the companies are going through a very tough time and only large ones will be able to withstand it without much problems. So for time being it is better to be with large caps if your time frame is less than 6 months. But if you have money to invest for longer time then many mid caps and small caps also very attractive now.