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Market Guru Anil Singhvi says liquidity is oxygen for market, reveals powerful strategy

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Asking stock market investors to learn from the 2008 slowdown, Zee Business Managing Editor Anil Singhvi has said that liquidity is oxygen for the stock market and the current rally is because of the ample liquidity available in the markets. The Market Guru said that the US Federal Reserve and other countries’ central banks are implementing their 2008 subprime loan crisis slowdown lesson that liquidity is the key and it can change market sentiment even when the fundamentals remain the same.

Speaking on the 2008 slowdown formula that we are implementing in current COVID-19 hit markets, Anil Singhvi said, “It looks like the US Federal Reserve and other countries’ central banks, which includes Reserve Bank of India (RBI) too, are implementing their 2008 slowdown lesson where liquidity was the key to defeat the financial crisis. The current rally in the markets is purely driven by liquidity because the fundamentals are still same. We are still fighting Coronavirus spread, a drug is still not available and as it was known earlier and now, it will become available only by the end of 2020. So, nothing has changed when it comes to the fundamentals, but during the last three months, market sentiment has changed and people have realized that they will have to live with the Coronavirus.”

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Singhvi said that on 24th March 2020, markets had made its bottom of around 7,500 and at that time too he had recommended the stock market investors to invest at least 40 per cent of their money as that was the best time for them to chip in. And in the last three months, the markets have shown 40 per cent pull-back rally and during this period people have booked profit at 9,500 and 10,000 levels.

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“I would like to remind those investors who booked profit at around 9,500 and 10,000 levels that market is driven by the liquidity and fundamentals are still the same. So, there can be come correction on the basis of some upcoming triggers like US Fed Balance Sheet. If it shows any sign of shrinking, then there can be another selloff trigger and those people will get another chance to chip in. I would advise them to go for long, at least 5-7 years as market sentiments have changed now and liquidity will continue to help markets to showcase a pullback rally,” concluded Anil Singhvi.



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