Raamdeo Agrawal, chairman, Motilal Oswal is of the view that the fear surrounding the spread of coronavirus to other parts of the world is really worrying.

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However, even in a bad scenario there a some good things happening. "All the commodity prices have collapsed because China is the largest consumer of commodities and now their consumption is down by 30-40 percent. The global system is wired up in such a way that the production continues or there is excess production and hence prices will correct or have corrected in many cases,” said Agrawal in an interview with CNBC-TV18.

According to him, India’s consumption is unlikely to get hit and so, one will have to look at the spaces where strong companies will do well.

However, the behaviour of the Indian stock market depends on the US because the ETF is a menace. "If there is a sell-off in emerging market ETFs, then outflows will be seen here as well and nobody knows what it will do to the underlying stocks. So, we could see some sell-off from those sectors as well. We may see some more correction in Indian market," he said.

When asked about insurance space, he said we expect life insurance to do well hereon as opportunity for that is very large. There is also news that life insurance companies can now also be allowed health insurance. So, the space could be a good bet because these developments could expand the opportunity for existing life insurance companies, he added.

On auto sector Agrawal said, the fall auto sales in China is a clear indication of the extent of shutdown, he said. However, there is a belief that the virus in a month or two may get contained and the supply chain will get restored or alternative supply chains will be found. The consumer demand for autos in India will continue.

“Auto demand should come back very strongly particularly from April onwards, once BS-IV and BS-VI adjustment is done,” he said, adding that maybe first quarter could get impacted but rest of the year should do well because demand will come back, fuel prices are also reasonable. According to some technical experts, oil is headed for a collapse, which could help our economy, he said.

From the commodity space, he said Gold has become very attractive and remains a safe haven right now, said, In the last ten years gold has done as well or even to some extent beaten the Nifty index,"

First Published:Feb 26, 2020 12:12 PM IST