{"id":10148,"date":"2020-06-18T05:07:54","date_gmt":"2020-06-18T05:07:54","guid":{"rendered":"\/blog\/?p=10148"},"modified":"2020-08-29T06:41:19","modified_gmt":"2020-08-29T06:41:19","slug":"how-have-global-indices-fared-during-covid19","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/wealth-services\/how-have-global-indices-fared-during-covid19\/","title":{"rendered":"How have Global Indices Fared During COVID19?"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

The\nCoVID-19 pandemic\nhas been referred to as the most serious global health emergency since the\n1918-1920 influenza outbreak, which claimed the lives of approximately 17-50\nmillion people with 500 million documented cases. Though the current outbreak\nisn\u2019t as mortal as the spanish flu, it has already infected millions and\nclaimed over three hundred thousand lives in just under half a year. It is\nclear to experts that these numbers are expected to grow steadily for the\nforeseeable future. <\/p>\n\n\n\n

The\nPandemic\u2019s true\nimpact has been felt on the global economy. Its emergence has led to a slump in\nconsumption and a disruption in the supply chains of all of sorts of goods and\nservices. Indeed, the outbreak is the natural enemy of a healthy economy, one\nwhich prevents people from partaking in the transactions that generate wealth. <\/p>\n\n\n\n

The\nfluctuations within Global financial markets are a key source of insight for\nthose seeking to understand the impacts of COVID-19 on the economy.  They have been heavily affected with many\nhitting bear territory (a drop of over 20% from recent highs) and growing\nsteadily more volatile, to say the least. Drops of over 20-30% have been fairly\ncommon with the market shedding nearly $15 trillion of wealth from February\n20th onwards.  The U.S. market in\nparticular, saw the fastest fall into bear territory, with the S&P 500\nfalling 20% in only 16 days. March 2020 has also gone on record as the most\nvolatile month in the history of the U.S. stock market, with the average daily\nswing recorded at 5%. In comparison, the Great Depression of 1929-33 saw an\naverage daily swing of 3.9%. <\/p>\n\n\n\n

Market\nwide circuit breakers designed to halt trade in case of rapid plunges, were put\nin place by the U.S. Securities and exchange commission following the October\n1987 crash when the Dow\nJones Industrial Average plunged by 22.6%. These circuit breakers had\nonly been triggered once in 1997 until they were called into action 4 times in\nMarch 2020 alone. <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

(Source\n: World Economic Forum)<\/p>\n\n\n\n

Additional Read \u2013 <\/strong>What is the Average Recovery Time For Global Downturns<\/a><\/p>\n\n\n\n

Despite\nthese worrying events, the\nS&P 500 index has managed to bounce back up by 23% from its low on\nMarch 23rd by the second week of April 2020, although stocks are still 19%\nlower than their previous high in February. This is an encouraging sign for\ninvestors, as a result of reassurance from government relief packages and low\nprices in a rising market. By May, the S&P 500, NASDAQ100 and Russell 2000 had all\nfallen by 15%, 4% and 29% respectively from previous highs.<\/p>\n\n\n\n

China,\nthe source of the initial outbreak has seen relatively lower declines in\ncomparison to the rest of the world with Shanghai falling by 7%, Shenzhen up by\n2% and Hong Kong down by 15% in the current fiscal year. They were also the\nfirst nation to enter and exit the pandemic cycle, indicating that recoveries will be manageable\nonce restrictions are completely lifted and normal economic activity resumes.\nThe country is predicted to grow at a rate of 1.1% for the rest of the year as\nopposed to the pre virus estimate of 5.9%.<\/p>\n\n\n\n

While India\u2019s handling of the coronavirus pandemic has fared better\nthan some of its counterparts with respect to its larger population, Indian indices are among some of\nthe worst hit by the current crisis. Indices such as Nifty and Sensex have seen drops of 23% in May\nfrom earlier highs in the current financial year. However, this number has also\nrisen from the 31%-40% drops in March in comparison to earlier highs in\nJanuary. <\/p>\n\n\n\n

Additional Reads – <\/strong>What are the Steps Taken by the Government to Fight Coronavirus in India?<\/a><\/p>\n\n\n\n

With\nregards to other global indices\nin May 2020, the Brailian BVSP BOVESPA stands at 31.6% down, the French CAC is\nat 25.8% down, the British FTSE 100 is 22.4% down, the German DAX is at 19.9%,\nthe Japanese Nikkei has seen a 17.% decline and finally, the Russian MOEX\nRussia has fallen 13.6% from previous highs in the year.<\/p>\n\n\n\n

Conclusion :<\/strong><\/p>\n\n\n\n

While\nglobal financial indices\ncan provide a rough picture of prevailing investor sentiments and financial\nclimates during a recession, they do not always provide an accurate depiction\nof the actual effects of such situations on economic growth or their potential\nfor recovery due to their relatively volatile nature. For a thorough\nexamination, one must use the information gleaned from financial markets in\ncombination with economic reports of countries and international organizations.\n<\/p>\n\n\n\n

For companies and individuals currently facing the brunt of the\noutbreak\u2019s impacts, and seeking to secure their financial security, Tata Capital\u2019s Wealth Management<\/a> Solutions are perfect. With\na wide range of investment products, a team of dedicated expert wealth managers\nand a commitment to personal convenience, Tata Capital\u2019s Wealth Management\nSolutions has everything you need in one place. <\/p>\n","protected":false},"excerpt":{"rendered":"

The CoVID-19 pandemic has been referred to as the most serious global health emergency since the 1918-1920 influenza outbreak. <\/p>\n

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