Indian benchmark equities crashed on Thursday as Russia’s attack on Ukraine pushed stock markets deep into the red, with investors’ wealth tumbling by more than Rs 10 lakh crore in less than an hour. Both BSE Sensex and NSE Nifty 50 tanked more than 4.5 per cent today as Russia-Ukraine crisis worsened. At close, the Sensex was down 2,702.15 points or 4.72 per cent at 54,529.91, and the Nifty was down 815.30 points or 4.78 per cent at 16,248.00. About 240 shares have advanced, 3084 shares declined, and 69 shares are unchanged.
Russian President Vladimir Putin’s announcement of starting a military operation in Ukraine sent global markets plunging into deep red. Putin on Thursday announced a military operation in Ukraine and warned other countries that any attempt to interfere with the Russian action would lead to consequences they have never seen.
The growing concern surrounding the deteriorating Ukraine crisis has pushed global stock markets into correction mode. According to market experts, investors should wait and watch the unfolding situation before taking any major commitments. Further, they suggest buying should be confined to stocks/ segments which are fairly valued or have good earnings visibility.
Buy High Quality Stocks in IT and Financials
VK Vijayakumar, cheif investment strategist at Geojit Financial Services, said: Selling during a crisis had never been a good decision. Therefore, investors should not panic and sell. Even though the situation is fluid, this is unlikely to become a prolonged hot conflict. Investors should not panic and sell their bluechip stocks. They can churn portfolios by selling weak stones and buying high quality stocks in IT and financials. If the crisis degenerates into a hot conflict, which is unlikely, markets can correct by another 5 per cent from here. But the likely scenario is the market consolidating around the present levels and individual stocks rising from their present levels.”
The increase in hostilities by Russia has expectedly spooked the global markets. Deepak Jasani, head of retail research, HDFC Securities, said: “While a fall today is a reaction to this development, markets anyway have been factoring such a development. In that sense a short term bottom may happen over today or tomorrow.”
Time to Switch to Quality Stocks
Mayank Joshipura, Associate Dean, Research, NMIMS School of Business Management, explained: “While the headline indices are down just about 10 per cent from the top, the individual stocks have come down substantially. This is the time to accumulate high quality names in large cap and large midcap space for 3-5 years horizon. If you are scared to do it or are fully invested, just stay put and don’t panic. If you are holding high beta, small cap names, it’s time to switch to quality as the easy money making era is over or about to get over.”
Opportunity to Accumulate High-Quality
“We believe current uncertainty won’t last much longer… one sided and it would get settled on the table of negotiation very soon, hence conservative long-term investors can use this dip as an opportunity to accumulate high-quality long-term stocks in a phase wise manner. For traders this market is at 1:1 risk reward ratio and avoid trades,” said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.
Follow a Wait and Watch Strategy
Ravi Singh, vice, president and head of research, Shareindia, said: “It is advisable that all investors should follow a wait and watch strategy and avoid any fresh entry at the current juncture. Long term investors having an investment horizon of 3-5 years will get a good opportunity to avert their portfolio, once the global situation stabilizes.”
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