INSUBCONTINENT EXCLUSIVE:
Mumbai: Foreign institutional investors (FIIs) have sold a net of $4.9 billion of Indian shares so far in March, and the outflows for the
month are set to surpass the 2008 crisis level.
However, foreign investors say India may be better placed relative to other emerging market
peers, when recovery sets in.
For now, risk was completely off the table, with global equities facing the downturn as rapidly-spreading
coronavirus pandemic has tightened its grip on the world.
Last week, the World Health Organisation (WHO) declared coronavirus as a pandemic
Globally, more than 2,00,000 confirmed cases have been reported and nearly 9,000 people have lost their lives due to the disease.
The number
of novel coronavirus cases in India has risen to 175 till Thursday evening.
Global equities from New York to Tokyo are in a freefall, and
are paying little attention to the stimulus packages by the governments and central banks, as focus has shifted to fears of recession, as
businesses were badly hit by the pandemic.
According to Hertta Alava, Senior Strategist at Nordea, Finland, the hit to first half GDP will
be very big, but if the epidemic slows down in Europe and the US as fast as in China, restrictions to travel and social contact could be
removed before the end of April
but not a long depression
added.
Not everyone, however, agreed.
Maarten-Jan Bakkum, Senior Emerging Markets Strategist at Hague-based NN Investment Partners (NNIP),
Particularly the US, the largest global equity market, is a concern in this context
peers?Benchmark 30-share Sensex has eroded 31.5 per cent value so far this month, joining the rout in global markets on relentless rise in
coronavirus infections globally.
Brent crude oil prices dropped to 19-year low at $20
somewhat from the lower oil price so the turbulence should not affect it as much as Russia or Brazil
economy was also likely to suffer.
Bank of America Securities has sharply cut the June quarter growth forecast by 90 bps to a low of 3.1 per
cent and the full-year India GDP target by 100 basis points (bps) to 4.1 per cent for FY2021, citing an almost certain global recession due
including some of the warmer countries, new infections have grown rapidly in the past week
a longer contraction in global trade growth, should be less of a problem for India than it is for the average EM index
But this should become a positive for India relative to EM once we know that India itself will not have a major health problem