Capital protection more important than returns for the next few months

Nifty earnings had barely started to grow till Q3FY20 and then the Covid-19 pandemic happened. Now there is a question mark on whether Nifty earnings will grow beyond single digits in FY20 and FY21

The three-week lockdown to contain the COVID-19 outbreak (experience of China and Italy suggests that the risks are skewed towards longer periods of lockdowns) meant around 75 per cent of the economy would have been shut down, resulting in a direct output loss of over 4 per cent. This stress will aggravate further as the lockdown has now been extended till May 3. Additionally, a high risk that the livelihoods of the predominantly unorganised workforce will be hit and a sharp increase in corporate and banking sector stress, which are likely to further weigh on growth in FY21. 

Moody's, Fitch,