Many Stocks Have Declined by almost 50 Percent in 2020 due to COVID-19 Panic Selling
Long term Investors always look for opportunities to buy their favorite stocks at low prices, especially during panic selling. However, it isn’t easy for anyone to correctly predict the bottom for markets during decline. And, an event like Coronavirus-19 led panic selling has left many people scratching their head about the impact of this pandemic. Such events are considered Black Swan by market experts and they offer a rare opportunity to buy stocks at good valuations.
Market indices have faced their fastest 30% decline during the panic selling caused by COVID-19 pandemic. The world is still trying to figure out the impact of this pandemic and market analysts are waiting for the curve to flatten in order to estimate the impact.
Automobile major Maruti Suzuki has touched 52-week low (Rs 4,002) last week compared to its closing price of Rs 6757 on February 20. TVS Motor Company is trading near its fresh 52-week low of Rs 251 compared to its closing price of Rs 446 on February 20.
Hotel stocks are among the worst hit as restaurants and hotels are facing lockdown. Travel sector will continue facing tough times as tourism will decline for the rest of the year, even once the coronavirus infections decline. Lemon Tree Hotels was down at Rs 20 compared to its closing price of Rs 62 on February 20. Indian Hotels closed at Rs 70 compared to Rs 140 on February 20.
Tata Power has declined from Rs 51 on February 20 to Rs 30. Ramco Cements, India Cements, KEC International, RBL Bank, Minda Corporation, Tata Steel have made fresh 52-week low this week.
Markets are expected to trade as per the sentiment in the global markets. Indian companies will start reporting quarterly results in few days and we can expect minor changes in the March quarter results. The real impact of coronavirus will be seen in the next quarterly results.