The underwhelming stimulus package announced by the federal government this morning triggered a deeper sell-off in the market.
The S&P/ASX 200 Index (Index:^AXJO) (ASX:XJO) crashed 2.9% in late morning trade after Prime Minister Scott Morrison unveiled a $17.6 billion package to ward off a coronavirus-induced recession.
The index was down a more modest 1.7% before the news conference and it's travel stocks like the Webjet Limited (ASX: WEB) share price and Flight Centre Travel Group Ltd (ASX: FLT) share price that are among the worst performers.
No safe havens?
But no sector was immune from the carnage. Big banks like the National Australia Bank Ltd. (ASX: NAB) share price and the major miners like the BHP Group Ltd (ASX: BHP) share price crashed by at least 2% each.
There doesn't seem to be any light at the end of the tunnel – at least not in the short-term.
Amid the gloom, there may be one stock that could be about to outperform over the coming weeks, according to Morgan Stanley.
Why this property stock could outperform
The broker believes that DEXUS Property Group (ASX: DXS) could provide some shelter in the property sector and estimates that there is a 60% to 70% chance of the stock beating its peers over the next 60 days.
"This is because of our view that DXS's earnings and valuation will be very resilient amidst a time of market volatility, given its secure contracted rent increases, against a backdrop of almost all-time low vacancy in the Sydney office market," said the broker.
"In addition, continued interest in Australian office in the direct market means DXS's asset valuation should remain robust, providing further support to its share price."
Defensive stocks in favour
Stocks with defensive earnings will be sort after in any market crash. The fact is, the shutdown in some sectors due to the global pandemic will spill over to almost every company.
Those directly in the firing line, like travel stocks including Qantas Airways Limited (ASX: QAN), have already warned about the hit to their bottom line.
Other stocks that are more removed from the economic hit from COVID-19 will fare better, as long as the pandemic gets under control in the next two months. Otherwise, all bets are off.
Foolish takeaway
Other stocks that also have defensive characteristics include blood treatment maker CSL Limited (ASX: CSL) and glove manufacturer Ansell Limited (ASX: ANN).
The Dexus share price wasn't spared from the sell-off today despite the positive broker note. The stock fell 2.3% to $12.09 at the time of writing.
But both CSL and Ansell are also in the red, highlighting how investors would dump anything and everything when in a state of panic.
