We have received a stimulus package of Rs 20 lakh crore. Why is the market not reacting to it?
In the five-day announcement of the Rs 20-lakh-crore stimulus package, we have been evaluating its impact on the markets and if you look at it, the market has reacted.
Take any kind of equity fund and you'll see that we are down by 13-20 per cent, depending on the kind of the fund invested in. To give some perspective, large-cap funds have fallen by about 13 per cent, while mid and small have roughly fallen in the range of 18-20 per cent.
Now, in the initial couple of days, ever since the virus was spotted and we started witnessing the consequential economic stress and the lockdown, the markets collapsed around 20-25 per cent at that particular time. But since then, we have recovered steadily. In fact, there's a far greater recovery despite having some down days. So, I think the market has reacted and taken the stimulus positively.
Further, my sense is that the market is taking things way too positively. The last one month or rather the last five weeks have witnessed more positive days than declines.