Market pain because of selloff by ETFs & Algos, and FII exit: Kunj Bansal

What is happening in the markets day after day? There is excessive selling pressure. Is this now about valuations or it is just about exiting positions?
It is not about valuation. It is about exiting positions because only when there is selling in stocks, the markets go down. The reason behind this is the impact of this whole COVID issue, which has not been yet quantified. It is becoming very difficult to fathom how much impact this whole issue will have on the economy. Possibly, in all earlier crises at a certain level, the economies or the government bodies or the multilateral international bodies were able to quantify the impact in economic terms, in commercial terms over the global economy, and over the respected domestic economies. If we go by the China experience, the spread initially will continue for one to one and a half months. If that happens, then visible slowdown is obvious on consumption, travel, conferences, exhibitions, autos and supply chain. But determining how much will the extended impact be and what will be the impact on secondary and treasury activity is a challenge. This will result in selling by ETFs, selling by Algos, selling by some people, especially the global investors just wanting to exit. The inability to quantify is resulting in this kind of market.

Any sort of recovery in the markets will only and only be based on future coronavirus cases either going down or stabilising. Are asset classes across the globe going to be more or less indifferent to monetary stimulus governments around the world may provide?
The first indicator of any semblance of stability will only come when people get comfort from the fact that the spread of disease is coming under control. It is topping out, it is plateauing out or it is going down and that is where the semblance of steadiness will come in. At this point in time delink that to the market. We have seen that the market in India and globally has corrected almost 30% from the peak. If selloff continues, there might come a point in time wherein instead of waiting for actual signs of the disease ebbing, maybe we can see the market bottoming out much earlier. But this is very difficult to call on both the points at this point in time.