D-Street Talk | What investors should do as coronavirus fears grow
Kshitij Anand talks to Pankaj Pandey, Head Research at ICICIdirect.com, to find out how investors should prepare for the virus outbreak.
January 30, 2020 / 02:37 PM IST
In the run-up to the Budget 2020 market momentum got disrupted due to the outbreak of Coronavirus in China which is now spreading to other countries as well, but this is not isolated incident for equity markets and investors should use the dips to get into quality stocks, says Pankaj Pandey, Head Research at ICICIdirect.com.
The outbreak will have an impact on global growth as well as Chinese growth if it plays out for an extended period of time. China usually contributes about 16 percent of global GDP and the last time when we had the instance of SAARS virus it led to a decline of 50 bps in the GDP, said Pandey.
Something similar is possible, but our sense is that the way growth bounced back after a few quarters – we expect a similar reversal to happen, explains Pandey.
He further added that in case the market correct we see it as a buying opportunity for investors as the impact will be short term.
In terms of expectations from Budget 2020, the emphasis would be on supporting or reviving growth that would be of prime importance along with measures to boost consumption, kickstart investment cycle, and generate environment.
But, the Budget is unlikely to surprise equity markets in a big way. We expect the fiscal deficit to slip towards 3.8 percent, and next year as well it would remain at elevated levels of 3.5 percent but that would not be taken negatively by the market, suggest Pandey.
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