On 25 March 2020, it warned of a bear market, stocks fell 50% and more from there. A month later, on 25 April 2020, it signalled that a rally was about to begin.
A few weeks later the stock market had one of the best trading days in a decade and has continued to climb ever since. Indian equities have recovered a part of its March losses from its worst plunge in over a decade. Central banks across the world have pumped in trillions to revive their economies after the Covid pandemic. Many analysts are worried about this liquidity driven stock market pushing up prices somewhat unrealistically. With the earning season getting closer, it will be an interesting time for the stock market. Few analysts have argued that the country is in a middle of a recession and a stock market bubble. With first quarter FY 2020-21 results around the corner, it will also include some bit of recovery that ostensibly began in June and hence throw a better idea of where the economy is heading. But the corporate earnings alone is not going to settle the broader bear/bull market debate. Brokers and high-net worth investors have been betting on both defensive and aggressive sectors by investing in pharmaceutical stocks and telecom and fast moving consumer goods (FMCG) stocks. A given that these segments will do well when most of the Indians are largely stuck inside their homes. Last week marked the end of a historic quarter for the Indian economy and the stock market. Over the next few weeks, corporates across the country will begin opening their books and give us an opportunity to see how the Covid pandemic has impacted their businesses. Trading with an actual earnings announcement could give quick gains, but may not be a consistent approach while trading after earnings announcement showing how a stock performs could be a better bet in these volatile times. Investors looking for growth stocks to buy have to be prepared for some volatility in the near term as the stock market copes with virus concerns, Indo-China border tensions and the economy. The most important criteria for choosing a winning stock to buy is staying power. The coronavirus is expected to change the way people live their lives for years to come, which means companies whose services are in line with that trend will prosper. Generally, media stocks should do well and analysts are betting on TV18 Broadcast quoting at around Rs 35 to be an interesting buy at present. The company is owned by Reliance Industries Ltd and is seeing marked improvement in its financial performance over the last few quarters. The company owns and operates many news, current affairs and entertainment channels like CNN IBN, CNBC TV18, IBN, Moneycontrol, News 18, Colors and others. For patient investors, the TV18 stock can double from the current levels in a year’s time.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.