Impact of Covid-19 Pandemic On Stock Markets

The rapid growth of the unprecedented pandemic has put the world of stock markets in jeopardy and transformed the worldwide business outlook unexpectedly. This article empirically evaluates the impact of the covid-19 pandemic on the stock market.

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Initially, the coronavirus, which led to the pandemic outbreak trigger in the city of Wuhan, in December 2019. It spread slowly all over the world. Since then, the world has transformed, changing our economies, our lives, and our business fortunes as well. Moreover, one can consider it as an unfolding journey that reflectS in the ups and downs of share prices.

Impact of Pandemic

Ever since the lockdown, stock markets loom under fear with prevailing uncertainties. The pandemic impact has sent stock markets throughout the world crashing to such levels not witnessed earlier. After a strong correlation with the indices and trends of the Global market, numerous stock markets happened to fall by approximately 40%.

While the stock markets of the world have gone through numerous financial crises during the past, the latest one was the Global recession in 2008. And, the present covid-19 crisis happens to be different from the earlier fallouts.

RBI Response to Stock Market Turmoil

Responding to the present turmoil in the stock market, the government and the RBI came up with a slew of reforms. Such as regulatory relaxation, reductions of repo rate, and additional measures for boosting liquidity within the system that the pandemic happened to impact. The corporate sector, on the other hand, also seemed to get a major pandemic blow. Loan growth, payment deferrals, sluggish business situations, and increased cases of bad loans surface in the health and development of economic activity.

Deceleration of the demand-supply chain, GDP growth, and cutting discretionary expenses have also been observed throughout the lockdown. This ultimately has led to a fall in marketing expenses, household incomes, hiring freeze, and reduced travel cost.

Organizations with increasing distribution reach, innovative products, a healthy balance sheet. Moreover, technology-driven processes revived the growth momentum after the lockdown. High capital expenditure and lower oil prices by the government can create capital, hence providing a platform to grow post-covid 19.

Other than that, numerous organizations have delayed significant purchases to avoid projects that happen to be complex and expensive. It sometimes might prove to be disruptive to existing business procedures. Constantly struggling to increase value on a regular basis. Organizations and stock market leaders need to take hold of the situation before the pandemic takes a toll on the entire stock business industry.

Outlook For Stock Markets

As far as the market outlook is concerned, we need to shift back our focus to its history. Drops in Sensex are temporary, and every dip provides investors with opportunities to enter the stock market to earn a higher return. Particularly for people with a long-term horizon.

Looking Forward

While the Covid-19 pandemic crisis is real and it greatly impacts the economy of world. Historically, these kinds of crises did not last long. It is because the world happens to be competent enough to rise up with answers for combating such challenges.

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With organizational shares tumbling due to the impact of the COVID-19 pandemic. The market leaders need to concentrate on the business stability. Thereafter, they make sure that they preserve the balance sheet and liquidity.