Global market participants overreacted to some important news and they did panic and emotional selling during last couple of days. It was more than expected. I see at least 13% upside for global indexes including All share index in Sri-Lanka.I prefer stocks to bonds now. S & P 500 can break its 2000 again.
We cannot see global situation like in 2008/2009. Globally especially in the USA and Europe weak sisters in banking world have gone now. Other banks have established in the banking world and their balance sheets are much stronger than 2008 now. Sri-Lankan banks also more stable when compare with some other banks in the world.
We don’t see a recession coming either. China has slowed down mainly due to slow activity in infrastructure but they are not contracting. South Asia including Sri-lanka has one of the fastest growth rates in the world despite having some short term issues. Each country has some growth areas in their economy.
Germany, the euro area’s biggest economy, is benefiting more from unprecedented stimulus by the European Central Bank. With unemployment at a record low, wages rising and oil cheaper, domestic spending has become the driver of economic growth. They have export to both emerging and developed world too. Performance of the U.S. economy and Japan is actually quite good too when compare with five years back.
There will be great demand for consumer staples, banking and finance and health care stocks globally specially in Europe, the USA and Asia.
In Sri-Lankan market, there are very attractive consumer staples stocks now.
Still we haven’t seen peak in the global markets.
In short it is time to prepare for intelligent buying not panic buying.
Please do your home work before buying and selling stocks specially period like today.