Half of sensex's earnings in April were erased in May 2 sessions
Mumbai: In just two trading sessions in May, strong sales have eliminated half of sensex April earnings of more than 4,200 points. Parallel to how the BSE benchmark had behaved during the peak of the entrance, a section of analysts says that the demonstration in April was a meeting of fools aimed at catching the gullible and the future is expected to be volatile with a downward bias until the pandemic. Related problems are established.
Consider this: From its all-time high at 42,274 points on January 20 this year, the sensex crashed 39% to a multi-year low at 25,639 on March 23. Then the index made a rapid recovery till April 30 as it added 4,250 points or 32%.
Thereafter, in just two sessions in May, the index has lost 2,264 points, or 7%, thus giving credence to the views by a section of analysts that the rally in April was a “fool’s rally”. The current sensex pattern - fall and rise and then again a fall - also has a marked resemblance to its 2008 trajectory, they said.
Market players said March was the time when investors feared coronavirus, the unknown enemy. Then, in April, most investors showed some comfort in the fact that governments were taking steps to contain their impact and also support economies through record stimulus packages.
However, although the spread of the virus in some developed countries is under control, India still lags behind, creating uncertainty about the country's economy and markets.
According to Arun Kejriwal, director of KRIS, an investment advisory services company, “we are in uncertain times not only in India but also globally. In such circumstances, strong volatility and irrational market movement would be the order of the day.
Meanwhile, Tuesday's rupee rebounded marginally in 9 countries to close at 75.63 against the US currency due to increased risk appetite after easing concerns of the China-U.S. Trade war.
The US dollar fell against major Asian currencies and the euro after a US official said the country was not planning any punitive action against China for handling the coronavirus pandemic.