There are reasons to be a buyer in current market scenario amid virus scare

Our experience with earlier epidemics such as SARS, EBOLA and ZICA does suggest that medical science will find out a solution sooner than later.

Coronavirus scare has acted as a catalyst for global equity meltdown and India is not an exception to this. It is difficult to call when the coronavirus scare will come under control. Our experience with earlier epidemics such as SARS, EBOLA and ZICA does suggest that medical science will find out a solution sooner than later.

India obviously has short-term pain to endure from global growth slowdown and equity meltdown.

However, there are few benefits from Coronavirus scare.

- Oil prices have crashed from $68 a barrel to $50 a barrel and are likely to remain subdued for some time.

- India runs official trade deficit of $58 billion with China. Due to coronavirus-led supply chain disruption, this deficit can come down significantly. This, in turn, will encourage local manufacturing.

- Many global companies would like to diversify their supply chain from China due to increasing cost and heavy concentration. If India can invite all those companies and become part of global supply chain management, then growth will get a big boost.

Foreign portfolio investors (FPIs) have been heavy sellers in last week as they scaled back risk. This might continue until there is a solution for coronavirus. However, this volatility will provide an opportunity for long-term investors to buy, if our experience of SARS, EBOLA is an indicator.

There was a lot of panic during SARS and EBOLA outbreak. However, medical science found a cure and the world continued moving forward. From the lows of SARS, the Nifty50 index has gained 10-fold by now. That said, it is difficult to predict how much the market will go down from current levels, as it will be dependent upon how soon and effectively coronavirus gets controlled.