The Market Podcast | D-Street welcomes stimulus measures but could retest lower levels

It has been a rollercoaster week for investors, but bears seem to have gained control once again. The Nifty50 fell 1.3 percent for the week ended May 15.

The fine print of the Rs 20 lakh cr stimulus measures unveiled by Prime Minister Narendra Modi is positive but, might not be enough to fuel market sentiment and Nifty could retest lower lows once again, Dr. Joseph Thomas, Head of Research - Emkay Wealth Management said in an exclusive ‘The Market Podcast’.

Historically speaking, even in the Great Depression, the US market fell in the first phase, and then recovered and then it fell again before it could move up to record highs, he said.

Joseph Thomas

Head of Research|Emkay Wealth Management

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For Indian markets, Joseph is of the view that the market could retest lower levels again, and then reverse the trend. There is an overarching influence of global factors as well which are impacting D-Street.

The announcement made by the Finance Minister, the first in a series, contained several measures targeted at improving liquidity and credit flow into MSMEs and NBFCs and smaller businesses.

This assumes greater importance due to the fact that it is these segments that have been adversely impacted due to the lockdown.

“These measures will go a long way in instilling confidence in banks, financial institutions, and investors in supporting the sections of business which actually require aid and help,” said Joseph.

He further added that the measures are more of a supply-side and there is very little that is on the demand side. Probably, the future announcements may contain a more balanced coverage of demand and supply-side factors.

Demand-side factors generally tend to work faster as it is oriented towards the consuming unit directly, he added.

(Tune in to the podcast for more)  

Date: May 19