There is no doubt that one of the signs of a growing economy is the movement of its financial market. Since the outbreak of the Coronavirus pandemic, economies all around the world have been fluctuating with all the economies registering a downfall in the first quarters of 2020. With the vaccines coming up and the lockdowns getting lifted, economies have started showing signs of recovery. However, as per the latest statistics, economies are registering an upward growth but with a little spike in the world shares value. Well, at least this is what happened in China. Despite growth of 2.3% in the last quarter, the shares have subdued.
What is it?
Even if you do not keep a track of it, you must have heard about the FTSE of Europe, NIFTY of India or SHANGHAI COMPOSITE. These are the different global indices. For a layman, a stock market is a collection of markets which represents the regular activities of the market. This buying, selling or exchange takes place as institutionalized over-the-counter marketplaces. These are then further regulated by a defined set of regulations.
Why in the news?
2020 witnessed what is popularly called the 2020 stock market crash. It was also named “the Coronavirus crash.” It was then the stock market experienced a massive fall. With the Coronavirus outbreak, immediate lockdowns, shutting down of the economy and the following fears, the world experienced one of its historic falls. For example, in March 2020, the DJIA or Dow Jones Industrial Average, US, plunged roughly about 26%. This was the result of immediate reactions to the novel Coronavirus. Since then, the economies and market have been struggling to recover. However, in the last quarter of 2020, with the government’s proactive actions and lifting of bans and lockdowns, most of the major economies have recorded a recovery. The economies recovered but definitely remained below pre-pandemic levels.
The Chinese government who was the first to record the COVID-19 case in the city of Wuhan has also started recovering. It recorded a recovery of 2.3% after a sharp fall in the initial years. India also recorded a recovery but at 2.4% below its pre-crisis high. The United States of America has also recorded a 2% (approx.) growth rate from its first and second quarter. However, the market interactions are something economists and industrialists have been cynical about. The findings of new strains in major economies and the second lockdown in London have somehow sent a sense of fear and uncertainty among the investors. In such a stance, it has become important for governments to boost industrial expenditure. With the new U.S. government promising fresh aid to its citizens, the global recovery is believed to take a fast pace.
The Coronavirus pandemic has not only impacted the stock markets and their world shares but has seriously shaken the economy. With the vaccines and easing up of movements, there is a hope for the recovery of global shares and economy yet slowly and gradually.