As readers will no doubt be aware, coronavirus has had a significant impact on global equity markets with these falling significantly over recent days. There have been substantial one day declines in most major indices with many of these daily falls being the largest since the financial crisis over ten years ago. Clearly investors are concerned about what action to take, if any.
It is hard to know what to do! Many commentators believe coronavirus is very serious and the threat of a pandemic is very real. This has clearly spooked investors, many of whom are selling. On the other hand, some brave investors are dipping their toes back into the market believing that this is a buying opportunity. However, until further evidence about the spread of the virus is available investors are just guessing.
So, what to do? Often in these situations the best course of action is to do nothing and wait for the market to recover. However, if you do believe that the virus will eventually be contained and things will return to normal, then investors taking a long-term view may wish to look at some of those stocks that have been badly hit.
Shares in Dart Group (1210p), the owner of Jet2.com, have fallen from a high of 1950p on 20 February, but these could recover strongly over the coming weeks. For those investors wanting to take more risk in a company more closely involved with the virus, shares in Novacyt SA (145p) may also be worth a look. The company has developed a novel coronavirus test and has signed distribution agreements in Asia and with a US healthcare group. Regulatory approval for the test is still needed in some areas but clearly this could have significant potential. It is impossible to predict the potential sales of the test, but readers may care to investigate further.
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