‘The Perfect Storm’ Will Keep Markets Volatile: HSBC Global’s Tushar Pradhan
“Volatility is clearly going to be the name of the game,” HSBC Global’s Tushar Pradhan says.
Indian and global stock markets are in the middle of “a perfect storm”, according to HSBC Global’s Tushar Pradhan, as they resumed their free fall after staging a recovery on Friday.
Domestic investors are facing too many things at the same time, such as the epicentre of the coronavirus outbreak shifting to Europe, large incentives coming from the U.S. and their impact on markets, overall global growth slowdown and issues around Indian banking system, the chief investment officer at the financial services company told BloombergQuint in an interview.
“It’s the perfect storm in the sense that one can’t tell what is the upside here and what is the likely path out of this trouble,” he said. “Volatility is clearly going to be the name of the game.” In such a situation, he said, investors should look at the relative price of stocks. “There is a plethora of good valuations and a plethora of opportunities.”
The timing of the investment, however, has to be determined by investors themselves, Pradhan said, based on the ability to hold and time period the investment is being made for. “Many investors have different horizons which is why there will not be a one-size-fits-all kind of strategy. But yes, clearly there are tremendous bargains out there.”
Indian equity indices resumed their declines on Monday, mirroring global peers, as the spreading coronavirus—110 confirmed cases so far—pose a new threat to the fragile recovery in the economy. The Sensex and the Nifty 50 are trading as much as 5 percent lower at 32,391.65 and 9,477,45, respectively. On Friday, the benchmarks capped the worst week in a decade with a bear squeeze as stocks rebounded on domestic investors lapping up shares and short-covering in the derivatives market.