After all, how deep is the market fall? How to keep yourself safe during ups and downs
Selling has intensified due to the increasing cases of Omicron in developed countries. Rising inflation, strict attitude of central banks, continuous selling by foreign investors have added fuel to the fire.
How deep is the market fall
The year 2021 will be one of the most talked about years in the history of stock markets. 2021, which started off as an easy money making year, will end in a challenging fashion as the market has witnessed huge volatility. Of the 37 stocks of Nifty that touched new highs in the year 2021, 30 are those that have lost 10.8 to 30 percent compared to 10.7% of Nifty. What are these shares let me tell you-
During January to October 2021, Nifty touched a record high of 18604, rising 4,622 points or 33%. This was due to the contribution of 37 out of 50 Nifty stocks, which set a new high in 2021. However, the markets made a U-turn and fell from higher highs as global funds such as Nomura, UBS, Goldman Sachs and Morgan Stanley downgraded India’s rating, citing expensive valuations and unfavorable risk-reward ratio.
Selling intensified amid rising cases of Omicron
The selling intensified due to the rapid increase in Omicron cases in developed countries. Rising inflation, strict attitude of central banks, continuous selling by foreign investors added fuel to the fire. Keeping in mind the decline in the market till December 20, 2021, the Nifty has fallen by about 2000 points or 10.7%. Market experts say that this fall is only a part of the uptrend.
However, the Nifty sell-off is intense as the 1,990 points fall is equal to 43% of the total gain of 4,622 points in 2021. If we look deeper, out of 37 stocks of Nifty which touched new highs in 2021, there are 30 stocks which have suffered more fall than Nifty. These 30 stocks have fallen 10.8 to 30 per cent against Nifty’s 10.7% decline, while Nifty has fallen only 10.70%.
Nifty recorded a decline of more than 10 percent
Tata Steel, Bajaj Auto, Kotak Mah Bank, Axis Bank, Adani Ports, Hindalco, HUL, Shree Cement and Tata Consumer Products are some of the Nifty stocks that have lost over 20 per cent from their highs. .
On the other hand, Wipro, L&T, Nestle India, Asian Paints, Tech Mahindra, Power Grid and Infosys have fallen lower than the Nifty as these stocks have fallen only between 2.5-10% since October 2021, while the Nifty has 10. There has been a decline of more than a percentage point.
How to keep yourself safe during ups and downs
According to Siddharth Khemka, VP-Head of Research (Retail), Motilal Oswal, “Short-term volatility should not be intimidated but one should look at downsides as a long-term investment opportunity. Buying slowly during the ups and downs will be beneficial. There is a golden opportunity to buy in largecap IT, cement, L&T, pharma and specialty chemical stocks.
