Spread of Covid – 19 globally led to sharp sell-off in March driven by FPI outflows – Though there was sharp increase of Covid – 19 cases in China in Feb’20 lockdown of Hubei province on the 23rd of Jan’20 helped contain the spread of Covid – 19 in China in the second half of Feb’20. However there was a rapid spread of Covid – 19 outside of China from the last week of February which led to a sharp fall in global markets in Mar’20 as there was a sharp jump in cases globally led by Europe, Iran, and the USA. As a result FPI’s were sellers in Indian equities for the first time since August 2019 and sold stocks worth Rs.61,972 cr. in March 2020.
Sectors like Auto & Auto Ancillary, Aviation, weaker financials & NBFC and hotels, travel & tourism are more vulnerable to the slowdown and therefore should be avoided initially. However we expect few sectors like FMCG, Pharma, Diagnostic & healthcare sectors to do well.

Download Full Report