First Published on April 7, 2020

We are feeling vindicated about our recent calls.

For some time now, we have been advocating, that India is escaping the ravages of COVID -19 (based on number of deaths and hospital occupancy) and have been recommending to increase equity allocation, albeit gradually.

We have been nibbling at Banking sector funds on every fall as well as we continue to hold significant overweight position in Pharma.

While, Nifty rallied 8.5% today, Pharma/ Banking sector funds are up 10.5%

We sense some level of confidence coming back amongst the fund management community as the realization dawns on them, that the CORONA numbers in India are not increasing like USA/Europe.

The fact that the contagion factor in India is in all likelihood much lower than 2.5, makes it easier to handle the situation here. A combination of testing and isolating along with instilling certain behavioural norms will help restore normalcy to a very large degree.

As a strategy we will continue buying on any sell off to around NIFTY 8300 levels.

Like everyone else, we are monitoring the COVID-19 situation closely, not only in India, but elsewhere in the world, in-order to make necessary changes to our strategy as necessary.

We see the evolving situation in USA as a risk. By dithering on suppressing COVID 19, they have made an error. My feeling is USA will face a much grimmer economic outcome as a result. Odds are high that from 2750 levels, S&P index is going lower than higher. This may put a lid on Indian markets in the shorter term.