What’s Happening?
Indian equity markets have corrected about 13% from the peak in October 2021. Analysts expect this year to remain volatile as Russia continues to wage war on Ukraine. Moreover, there are heightened concerns about stubbornly high inflation, supply chain disruptions, aggressive FII selling, rise in crude oil prices and the upcoming COVID-19 wave. Amidst all these factors, there are fewer chances of volatility settling down.
Like every coin has two sides, so does the stock market. The biggest boon of the market is that even if it’s at its worst, it provides the investing community with a golden period to invest. Analysts have said that the market correction should be looked at as a window of opportunity. In the past whenever the markets crashed, the indices jumped back to their peak levels and more just after the correction.
Lessons From the Past
In every war situation or significant events - 9/11, 2008 recession and the recent COVID-19 lockdown - equity indices had corrected over 10-15% and then recovered by 20% or more in the next few months. Let’s take the single most significant event that took the world by storm - COVID-19. The markets corrected 34% in 2020 and bounced back by 128% in the next few months.
(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)
