Nippani & Washer (2004) examined the effect of SARS on the stock markets of China, Indonesia, Canada, Hong Kong, Special Administrative Region of China, the Philippines, Thailand, Singapore and Vietnam. They found that SARS had no negative effect on the affected countries’ stock markets except for China and Vietnam. Siu & Wong (2004) documented the negative effects of SARS on the demand side in Hong Kong. They described that in the short run, local consumption and the export of services like tourism and air travel seriously affected. But the goods continued to be exported as usually and hence, the economy did not face any supply shock. Chen, Shawn & Gon (2007) analyzed the impact of the SARS outbreak on the stock price of Taiwanese hotel with the help of an event study. The stock of Taiwanese hotels showed significant negative cumulative abnormal returns on and after the day of the SARS epidemic. Wang, Yang and Chen (2013) documented that an outbreak of infectious diseases has a significant effect on the biotechnology stock performance in Taiwan. In China, the epidemics for instance SARS and H7N9 have badly affected the population health and the economy. Both H7N9 virus and SARS presented the global epidemic risk, but the economic and social effects of H7N9 were not as severe as in the case of SARS (Qiu, Chu, Mao& Wu 2018). Ichev & Marinč (2018) find that Ebola outbreak affected the stock of the corporations those are geographically nearer to both the origin of the Ebola outbreak and the financial markets. The outbreak affected small and volatile securities. Chen, Lee, Lin & Chen (2018) examined the impact of the SARS outbreak on the long- run relationship between China and four Asian stock markets. They documented that time-varying cointegration exists in the stock price indices and SARS outbreak did weak China’s long-run relationship with the four markets. Liu, Manzoor, Wang, Zhang & Manzoor (2020) evaluated the effect of coronavirus pandemic on 21 stock market indices in harshly affected countries, including Korea, Singapore, Japan, USA Italy, UK and Germany etc. with the help of event study they found that stock markets in these countries fell very quickly after the COVID-19 outbreak. Asian countries had more negative abnormal returns than in other countries. Now we will move to the next objective of the study where we shed light on the influence of Coronavirus pandemic on the Indian stock market with the help of event study from the period 22nd January 2020 to 8th June 2020. We have analyzed the impact of this Pandemic on the constituents of the BSE Sensex 30 index. The S&P BSE SENSEX is a free-float and market weighted stock market index of 30 financially sound corporations listed and well-established on the Bombay Stock Exchange. These 30 corporations are most actively traded and the largest securities, which are the representative of many key industries of the Indian economy. We have also examined the performance of stock markets of top ten countries severely affected by COVID19. We have taken the benchmark index of each country that represents the stock market of a particular country. These countries and their respective indices are as follows: The outbreak was declared a Public Health Emergency of International Concern on 30th January 2020. In India, the first confirmed case of the carnivorous pandemic was also found on 30th January 2020. Here we determine the abnormal returns for the constituents of the BSE Sensex 30 index, using the market model and taking S&P BSE 500 as the market proxy. The daily adjusted closing prices of stock are converted into log return, as well as the closing value of the index into market log return. The estimation and observation period for this event study are as follows: Event Period or the observation period: 22nd January 2020 to 8th June 2020. Estimation Period: 21st January 2019 to 21 January 2020. Abnormal Return = Actual Return– Expected Return Expected Return on security (Rit) = αit + βi (RMt) + εitRit is the expected return on security i and at time t RMt is the market portfolio return at time t αi and βi are the intercept and slope of security i respectively εit is the error term of the regression model. After this, we have calculated the cumulative abnormal return (CAR) which defines the value of an investment. 

The Reasons for the Slowdown in the Economy

While Sensex rose during the course of the year, both the BSE Small-cap and Mid-cap indices saw their market capitalization decline. The BSE Small-cap index fell 6.85% in 2019 and the BSE Mid-cap index fell 3.05 & percnt;%. Only eight of the Sensex's 30 companies have seen gains of more than 20%, and only a small fraction of those companies' earnings are reflected in the index's overall performance. So, it's safe to assume that Sensex isn't accurately portraying the state of the economy.

It is clear from the above discussion that in the recent months, the economic numbers dipping to low and the stock market are achieving to newer heights, this is creating a dilemma about the real state of the economy. The GDP growth rate of the Indian economy has fallen to 4.5 per cent to its six-year lows, in the second quarter of the financial year 2019-20. This dipping in GDP rate is a sign of threatening times in the future. Graph 1 is showing the GDP growth rate from the first quarter of 2017-18 to third quarter of 2019-20. Growth has decreased since the fourth quarter of FY18 (8.13 per cent). It was 4.55 per cent in the second quarter of 2019-20 which was reached to a six-year low. In the next quarter, it was expanded to 4.7 per cent matching market hope.

The most important reasons for this sharp weakening in the GDP growth rate can be understood as follows: 1. The prime economic indicators expose that economy is not in good shape: Unemployment rates can be used as a measure for economic performance. In August 2019 the unemployment rate of India increased to 8.2 per cent from 7.3 per cent in the previous month and in October 2019, unemployment was recorded at 8.1 per cent. A big number of labour forces were without jobs which reflect the slowdown in the economy. The Purchasing Manager’s Index (PMI) of India is the gauge of the manufacturing sector’s health. PMI is constructed based on the five key indicators these are inventory levels, production, new orders, supplier deliveries and the environment of employment. If the index value is above 50 per cent, this shows positive growth in the industrial sector, while the index value lower than 50 per cent shows a negative situation or contraction. In July 2019 the index value was 52.5 that was decreased to 50.6 in October; this is showing that the health of the manufacturing sector is not good as the number of October is very low. Eight Core Industries Index is a monthly production index, which is also reflected as a prime indicator of the monthly industrial performance. Eight Core sectors are Electricity, steel, coal, refinery products, natural gas, crude oil, cement and fertilizers. The growth rate in this index reported -1.9 and -5 in August and September, respectively. The Index of Industrial Production (IIP) in India was observed 131.8 in July 2019, after that we can see the contraction in IIP as it decreased to 126.2 in August 2019 and reached to 123.2 in September. 2. There were some structural factors which are responsible for this current slowdown in the economy, i.e. low household income, comprising slowdown in investment and demonetization, this all leads to lethargic consumer demand. 3. Tax revenue of India in September 2019 was very low, i.e. Rs. 91,916 crore. The GST revenue collection was also very low. 4. The last year slowdown in the Indian economy observed across the sectors. The overall fall in the consumption seen in sectors such as FMCG, Auto, manufacturing sector and Consumer Durables have pulled the economic growth lower. 5. This can be mainly credited to the stressed rural economy because of low growth in Minimum Support Prices (MSP), increasing unemployment and liquidity stress among NBFCs that made financing hard. The low consumption has led to corporations turning alert and leading to a slowdown in sectors such as Capital Goods and Cement. 6. The increasing number of non-performing assets (NPAs). 7. Low government spending, liquidity pressure among NBFCs and sluggish transmission of interest rates from banks led to a slowdown in the real estate, power and infrastructure. 8. The trade war of US-China and global economic slowdown had badly affected the export of India. All the above reasons have a hand in this slowing down of growth rate.

The following are the most crucial factors in comprehending the GDP growth rate's sudden slowdown:

One can see that the economy is not doing well from the primary economic indicators:

1. The unemployment rate is a useful indicator of the health of the economy. The unemployment rate in India rose to 8.2 percent in August 2019 from 7.3 percent in July 2019, and it remained at 8.1 percent in October 2019. The slowdown in the economy is reflected in the large number of people in the labour force who are currently without work.

2. India's manufacturing sector is monitored through the Purchasing Manager's Index (PMI). Inventory, production, new orders, supplier deliveries, and the employment climate are the foundation on which the PMI is built. If the index number is greater than 50%, it indicates expansion in the industrial sector; if it is less than 50%, it indicates contraction. The index value in October 2019 was 50.6, down from 52.5 in July of this year; this indicates that the manufacturing sector is not in good condition.

3. The Eight Core Industries Index is a leading indicator of monthly industrial performance and a measure of production output every month. Electricity, steel, coal, refinery products, natural gas, crude oil, cement, and fertilisers make up the other eight core sectors. This index's stated growth rate was -1.9 in August and -5 in September. It is clear that the Indian economy is contracting as the Index of Industrial Production (IIP) fell from 131.8 in July 2019 to 126.2 in August 2019 and then to 123.2 in September 2019.

4. Two structural factors are to blame for the present economic slump: low household income, which includes a decrease in investment and demonetization, and a consequently sluggish consumer demand.

5. There was a significant drop in India's tax revenue in the month of September 2019; the country only brought in Rs. 91,916 crore. Similarly dismal was the GST income collection.

6. The Indian economy as a whole has slowed down during the past year. Economic growth has slowed as a result of a general decline in consumer spending across FMCG, auto, manufacturing, and consumer durables.

7. Low increase in Minimum Support Prices (MSP), rising unemployment, and liquidity stress among NBFCs that made borrowing difficult are mostly to blame for this. 5. As a result of the low consumption, businesses have become cautious, which has slowed down industries like the Capital Goods and Cement industries.

8. the rise in non-performing assets (NPAs).

9. Real estate, power, and infrastructure slowed due to low government spending, liquidity constraint among NBFCs, and poor transmission of interest rates from banks (7).

10. India's exports were hit hard by the United States-China trade war and the worldwide economic recession in 2018.

This decrease in growth rate is due in large part to the aforementioned factors.

Source: www.macrotrend .com

The Stock Market is Rising Amid the Slowdown in the Economy

Since the security market is meant to be an indicator of the economy's health, this seems to run counter to first impressions. There is widespread belief that the expansion of the security market correlates favourably with increases in economic output. However, this is not entirely accurate. So much researchhave recorded evidence suggesting Sensex may not be a good proxy for GDP growth. The correlation between stock market indexes and GDP growth has been the subject of a lot of research, however much of it has focused on one particular time period or one particular country. Investors who claim to have found no link between the stock market and economic expansion (Gan, Lee, Yong& Zhang 2006). Reddy (2012) and others found a positive correlation between the stock market and GDP, but Osamwonyi and EvbayiroOsagie (2012) found a negative correlation. We can therefore conclude that the Sensex is uncorrelated with GDP expansion.

There are a variety of influences on the economy and the markets, therefore their movements can vary. Both the stock market and economic growth are susceptible to external factors such as government policies, economic conditions, growth momentum, sector outlook, the availability of cheap credit, and consumer demand. Nonetheless, global factors such as the growth of central bank balance sheets, the availability of easy money, declining interest rates, and global capital flows often have an impact on the financial markets and on investors. Financial markets and investors frequently think forward. After hearing negative news, investors swiftly sell their shares and shift their attention to what corporations and governments are doing to fix the problem. Similar to what happened back then, this causes a rise in the price of securities, which continues to confound those outside of the market and experts.

If you're wondering why only a handful of companies are represented by the Sensex and Nifty, the answer is that they all have very high market capitalizations. From 44.77 percent in January to 48.81 percent at the end of December, the Sensex 30 securities' share of India's overall market value rose.

Investment types and information imbalances are major factors. It is commonly held that when an index or investment drops by 20% or more, and sometimes as much as 40% or 50%, all the bad news has been priced in. After that, investors start to see it as a buying opportunity, depending on the company, management, and industry, in anticipation of the good news that will raise the stock and start the subsequent leg of the rally. Let's look at few examples to see what I mean:

In the first (April–June) and second (July–September) quarters of 2019–20, GDP growth hit a six-year low and surpassed 5%. Because of the GDP figure, investors panicked, and the Sensex dropped 1.84 percent over the course of two days. But when the GDP figure for the second quarter was released on November 29th, investors' reaction was less stagy. The Sensex dropped 0.29 percent in the two days following the report's release.

The Indian economy expanded by 7.8 percent in 2015–16, making it the fastest-growing major economy in the world. However, the state of the market was dismal that year. By the end of February 2016, the Sensex had dropped 22.92 percent and the Nifty had dropped 21.99 percent. Despite India's poor GDP growth in 2013–14 (6.6%), the country nevertheless attracted foreign investment of Rs 79,897 crore. India had a 3.39 percent gap in its current account and inflation was hovering around 10 percent. Investors poured over Rs 1 lakh crore into shares despite the fact that the economy showed no improvement the following year. Multiple factors contributed to this variation, and it occurs frequently. Nothing here is strange or uncertain. Given what has been said above, it would be a mistake to infer either that a rising stock market automatically portends future economic expansion or that a rising economy automatically produces high stock returns.

Very few stocks are responsible for the market's gains. While the large-cap indexes have recovered somewhat, the small-cap and mid-cap ones remain in a bear market. However, the rally is being led by only a select few companies or industries. At its January 2018 peak, the BSE small-cap index had dropped by a whopping 33.44 percent, while the BSE mid-cap index had fallen by 19.22 percent.

The top gainers account for about 35% of the Sensex's and Nifty's total weight. As a result, the index will move in the same direction as the stocks that have gained the most. The index will move in the same direction as the stock with the largest gain. The foregoing dialogue makes it abundantly evident that despite the sluggish economy, only a select few firms and sectors are thriving. India has received over Rs 1 lakh crore so far this year from overseas investors. Additionally, foreign direct investment (FDI) is at a record high this year, up around 7.5% from 2017. And therefore, next year's rise in the Indian economy is expected to be met with optimism not just from domestic but also from international investors. This is the only reasonable explanation for the current market turmoil, and it has been recognised by both domestic and international stockholders.

The Stock Market's Recent Rally: Evidence from Around the World

Investor confidence throughout the world is at an all-time high. Foreign direct investment in the form of equity was Rs. 30,774 crore in July 2019, but only Rs. 18,164 crore in August 2019. In December of this year, it climbed to a record Rs. 33,166 crore. Let's ruminate on the world-historical causes of the stock market's ascent:

1. After 18 months of economic war, the United States and China decided to sign a trade agreement on January 15, 2020, which will raise exports from U.S. manufacturers and farmers, protect American trade secrets, and lessen tensions over the long term. This was good news for the global equity market.

2. On January 31, 2020, roughly four years after the Brexit referendum, a government led by Boris Johnson was elected in the United Kingdom. That this is what most people in the UK want is no longer in doubt in light of this victory.

3. It was decided to remove the enhanced fee on equities capital gain for both foreign and domestic investors.

4. Within 15 days, the loan paperwork must be returned to the borrowers. That contributes to the accelerated processing of a loan.

5. An immediate disbursement of Rs. 70,000 crore to be used in recapitalizing public sector banks. Consumers, businesses, debtors, small merchants, medium and small enterprises, and so on will all reap the rewards.

6. Banks have decided to pass on rate reductions to borrowers via a lower MCLR (marginal cost of funds-based lending rate).

7. Reduced monthly payments on home, retail, and auto loans by linking the Repo rate to interest rates directly. Costs for industries to borrow working capital will decrease.

8. Within 30 days, we shall pay out any and all outstanding GST refunds. In the future, we will also handle any GST refund issues within 60 days.

9. Inter-ministerial task committee to approve mechanism via which many infrastructural projects will receive funding, with a budget of Rs. 100 lakh crore.

10. The auto industry has been revitalised through a number of initiatives.

11. Vehicles with a BS-IV emission standard that are purchased before March 31, 2020, will be road-ready for the duration of their registration.

12. The government will reconsider its scrappage policy and ease its ban on the acquisition of new vehicles for government departments in order to replace their ageing fleet of vehicles.

13. The government intends to establish an entity, i.e. Development Financial Institute, to provide credit enhancement for infrastructure projects and long-term finance to housing projects, particularly in the Indian context (DFI). Inasmuch as monetary institutions do not have the capital necessary to back lengthy initiatives.

Part 2

Consequence of Coronavirus on the Indian Stock Market

In December 2019, a new coronavirus epidemic began in China and has already spread to almost 180 nations around the world. Infected individuals on June 11th, 2020, number 75,97,304, with 4,23,844 having passed away as a result of the infection. China, Italy, Spain, France, and Iran account for more than 90 percent of the global death toll. Stock markets around the world have experienced extreme volatility and instability in recent weeks, perhaps as a result of the COVID-19 pandemic.

Until April 14th, 2020, the entire country is under lockdown, which has a devastating effect on the Indian economy. Many sectors are being hit hard, including tourism, transportation, hospitality, manufacturing, and even leisure activities. The coronavirus has a disproportionately negative impact on low-income earners. Those without steady incomes, such as the elderly, rickshaw drivers, day labourers, street vendors, homeless people, persons working in the informal economy, etc., are at the greatest risk. Millions of people's incomes have taken a hit as a result of falling retail sales and the prevalence of unemployment. As a result, GDP growth slows dramatically.

By 2020, Moody's expects India's GDP to have grown by only 2.5%, down from an earlier projection of 5.3%. According to Goldman Sachs, India's real GDP in FY 2021 will be 1.6%, down from 3.3% in FY 2020. If Modi's government is obliged to further tighten security, these numbers may drop even further.

Is India going to be able to weather this storm like it did in 2008? "India faces today with arguably largest emergency since independence," said former RBI Governor RaghuramRajan. The reason for this is that despite the tremendous demand shock caused by the global financial crisis of 2008-2009, our workers were able to continue working normally. Simply said, businesses wouldn't survive without it. IMF chief economist GeetaGopinath explained in a blog post that sluggish demand is the result of consumers and businesses being hesitant to spend. In addition, firms in India are experiencing supply shock, which will result in a halt in production. Due to the fact that there are significant challenges in raw material production, the manufacture of even critical items and transportation systems is hampered.

This section of the research looks at the market reaction to a major epidemic, such as Coronavirus in India. To determine if investors experience any kind of out-of-the-ordinary profit during the event period, we conducted the Event study. A company's abnormal return will vary from one another based on about the company and the sector in which it operates, its history, and its current financial standing.Markets around the world have taken a severe beating as news of a novel coronavirus pandemic spreads beyond China. Both the BSE Sensex and the NSE Nifty have been on their worst streak in years since last week. When the dust settled on March 18, 2020, the Sensex had fallen to 28,896 after a loss of 1,709 points, and the Nifty had fallen to a three-year low of below 8,500. (Graph 2 and Graph 3). The Sensex finished the day at 25,981 on March 23, 2020, down from the previous day's close of 29915.96. Dropping by 3934.72 points was a significant amount. Meanwhile, the NSE nifty closed the day at 7610.25, a loss of 1135.2 points from the previous day. Both the Sensex and the Nifty began rising after March 23, 2020, and by June 2, 2020, they had reached 33,825.53 and 9,979.10, respectively. The VIX in India peaked at 83.61 on March 24, 2020, and after dropping steadily since then, it reached 29.66 on June 11, 2020. Daily record lows have been set in most major stock markets around the world. The stock markets across the globe are heading in the same direction, as shown by the graph. All stock markets have been significantly impacted by the Coronavirus pandemic, displaying the downward movement from January to the last week of March. When this happens, we'll see the stock market recover as all the indices begin to climb and show positive trends again. As a result, COVID-19 is having a negative impact on all stock markets, especially through the end of March. Uncertainty about the future may have contributed to a flight to safer assets (like gold), causing these indices to fall.When compared to the 2008–2009 crash and the dot-com bubble, the current decline in the stock market is both more rapid and more severe. While the 2008-2009 recession was short-lived, the current downturn has been unfolding over the course of two months as the world has come to terms with the magnitude of the economic disruption caused by the COVID-19 pandemic. The actual returns for 2019 and 2020 are displayed in Graph 14 and Graph 15, respectively. For 2019, the vast majority of businesses forecast positive actual returns. Except for two, all of the companies have actual returns that are negative in 2020. Concerns about the global economy's recovery in the coming months have been exacerbated by the recent uncertainty surrounding lockdowns.Moody's warned that the Corona-induced shock in emerging economies like India would be exacerbated by a lack of resources to support businesses. In Graph 16, we can see how Covid-19 affected the stock markets and the Cumulative Abnormal Returns (CARs).With the exception of HDFC Bank, every other bank in India has a negative CAR. The CAR of Indusind Bank is the lowest of any bank at -63.6 percent. It's worth noting that Axis Bank's CAR is likewise significantly negative at -25.5 percent.The banking industry could feel the pinch of defaulted loans. Moody's predicts that RBI's three-month suspension programme will mitigate the negative credit impact of the Corona issue on its borrowers in the short-term.Technology software firms Tech Mahindra (-25.3%), Tata Consultancy Services (-4.7%), HCL Technologies (-2.7%), and Infosys (-1.6%) are all suffering from the pandemic's negative CAR.Coronavirus has also had an impact on the power generation sector, with NTPC (-5.1%) and Power Grid Corporation (-8.4%) both reporting negative CAR.Two of the three businesses in the fast moving consumer goods (FMCG) industry saw increases in CAR during COVID-19 (Nestle and Hindustan Unilever Ltd., with CARs of 12.4% and 9.9%, respectively), while ITC saw a decrease (-4.8%).HDFC and Bajaj Financing, two major players in the housing finance industry, both have negative CARs as a result of COVID-19, at -18.3 and -34 percent. As both Maruti Suzuki and Mahindra & Mahindra have a positive CAR, the automobile and utility vehicle industries are unaffected by COVID-19.The agricultural and real estate industries are also taking a major hit from the pandemic.The agricultural industry, which accounts for 60% of the workforce and provides approximately $265 billion to GDP, will be hit hard. An epidemic has broken out just as the crop is about to be harvested and sold at a high price. Long-term damage to India's rural economy from a lack of workers to harvest their crops and a lack of reliable transportation options are likely. The real estate industry, already struggling due to a lack of available capital, has seen its plight exacerbated by the current lockdown.

The Confederation of Indian Industry (CII) surveyed 200 Indian CEOs on the spot. In which they mostly expressed worry that their income would drop by at least 10%. There will be layoffs in the future, say 52% of the CEOs polled. Prior to the pandemic, unemployment in India had already reached its highest point in 45 years; however, the situation has worsened since then.

On the other hand, we do not see any major abnormal returns before January 30th, 2020. In March, and especially in the month's final two weeks, most businesses showed a marked increase in reaction and earned significantly abnormal returns. In addition, most companies saw substantial gains in April and May.

In June, abnormal profits were low for many businesses. The global death rate due to Coronavirus increased by 47% on January 23rd, 2020, and by 64% the following day (Graph 17). Starting in February, the rate began falling, and by February 26, 2020, it had dropped to 1%. The rate was unexpectedly bumped up to 15% as of March 24th, 2020. After that, on May 3 of that year, 2020, it dropped to 1% once more. The overall death rate fluctuated by 1% to 2% between May and June. On April 17, 2020, the coronavirus epidemic claimed the lives of 8,435. Graph 18 depicts the gradual decline in daily deaths that begins after a certain threshold has been reached.

For the whole 91-day event period, every component of the BSE Sensex 30 has an extremely high CAR. In a sample of 30 enterprises, only 13 have positive Abnormal Returns (AR) on average, whereas the remaining 17 have negative CAR. As a result, COVID-19 has a detrimental impact on the Indian stock market.

What may be done to lessen the blow:

"Central banks around the world should be ready to provide ample liquidity to banks and non-banking finance companies,' says GeetaGopinath, chief economist at the International Monetary Fund. She also mentioned that the government could help these companies out with their short-term cash flow problems by providing temporary and targeted credit guarantees. Former governor RaghuramRajan advocated for weekend SMEs to receive specialised assistance. With the goal of protecting the poor and marginalised from harm, Nobel laureate Abhijit Banerjee proposed a system of direct cash distribution.

To limit the economic fallout, the government has taken the following steps:

1. Refunds should be issued sooner by extending the tax filing deadlines and should be distributed immediately.

2. Handing over industries that have gone bankrupt, rearranging supply lines, and bailout packages for failing industries

3. In May of 2020, our finance minister, Nirmala Sitharaman, made five announcements for the 20 lakh crore package of Aatmanirbhar Bharat Abhiyan, aimed at healing the economy after it was hit by the Coronavirus crisis.

4. The Great Depression was nothing compared to this crisis. Worryingly, no economy will be immune to this downturn's effects. India's economy may fare better than those of other countries if globalisation is put in reverse gear and new trade barriers are imposed because India is less dependent on exports. Crude oil is India's most expensive import. The precipitous drop in oil prices was a major factor in protecting India from an outside shock.

Meanwhile, international rating agencies anticipate a worldwide economic downturn.The extent to which the Indian economy slows down will be determined by the country's reaction to the crisis in the coming days. The economic rebound, according to many experts, is expected to look like the letter "v," with an initial steep upswing followed by a more gradual levelling out.However, even if the lockdown is lifted, individuals may still be hesitant to spend money because of the unpredictability.

Investment Strategy

One piece of advice given to investors is that they should maintain a level head despite the current climate of uncertainty. If they start freaking out, it only gets worse. Any short-term gains made by an individual investor who sells out of panic could be lost. Therefore,In this trying period, patience is crucial.Stock brokers typically advise clients and investors to purchase shares during market downturns and then sell them after a subsequent market upswing. However, it is a different action to trade when global markets are suffering due to a coronavirus outbreak. At this time, it is extremely challenging to predict how long this pandemic will last. Equity investors should use a barbell strategy, in which they hold a diverse portfolio with a heavy emphasis on either high-quality growth stocks or beaten-down or mean reversion plays such as public-sector enterprises (PSEs), corporate banks, utilities, or pharmaceuticals.Investors should rebalance their portfolios when the market drops and avoid using too much leverage during volatile periods. Long-term investors should look to add shares of stock to their portfolios whenever the market experiences a significant decline. Investor’s looking to buy mutual funds now should focus on large- and multi-cap funds until market volatility subsides, at which point they can diversify into mid-cap funds.Blending index funds/ETFs with balanced advantage funds/aggressive hybrid funds is another viable option.Long-term government bonds are a good option for those looking to invest in fixed income and gain the potential for capital appreciation. As such, this will be the investors' fail safe.