Global financial markets that were cheerfully sailing on fair winds of liquidity, infused by global central banks, have been suddenly hit by a giant wave of selling that has sent prices crashing and left investors gasping for breath.
Even until mid-February, investors were complacent that the coronavirus would be contained within China and a few other countries. It’s only when it became obvious that the virus was set to wreak havoc through Europe and the US that panic gripped investors.
The S&P 500 lost 33 per cent in just 20 sessions, one of the swiftest declines in recent times. The CBOE VIX, the investor fear gauge, hit 85.4, a level last recorded in 2008, and the CRB index that tracks commodity prices, is at its lowest in two decades.
What makes this market fall different from the 2008, 2001 or 1992 crashes is that the cause for the ongoing decline is a virus that threatens the entire society.
The COVID-19 pandemic that began in the Wuhan province of China in December 2019, has already affected 206 countries, infected over 12,00,000 people and claimed around 64,000 lives. And the pandemic’s peak is at least two weeks away.
If we look at past pandemics of similar intensity and scale, the 2009 H1N1 flu and the 1918 Spanish flu are the closest comparisons.
The 2009 pandemic infected between 700 million and 1.4 billion people across the globe, accounting for 11-20 per cent of the population, and killed 1,51,700-5,75,400 people. The virus was most virulent between April 2009 and April 2010.
The Spanish flu (1918-1919), the deadliest pandemic in recent history, infected about 500 million people, or one-third of the world’s population then, and claimed 50 million lives.
It is, therefore, quite likely that the ongoing pandemic continues over a large part of 2020.
This story is from the April 06, 2020 edition of The Hindu Business Line.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the April 06, 2020 edition of The Hindu Business Line.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Covid Presents An Opportunity For India
India must attract investors exiting China post-Covid. Streamlining of project clearances and relaxation in FRBM norms will help
Did Alternative Assets Shield You From Covid-19 Volatility?
The assets closely linked to stock and debt markets could not stave off the losses
How To Put Aircraft To Bed
Preserving grounded planes, to get them up and flying at short notice, is a challenging task. Ashwini Phadnis captures the process
There Can Be No Going Back On WFH
Covid-19 has fast-forwarded the shift to ‘work from home’. However, some face-to-face connect will always be needed
UN, WHO Urged To Ensure ‘Benefit Sharing' Of Covid-Related Data
Biopharma firms should reach vaccines, medicines to poor nations at an affordable price, say civil society bodies
With No Clear Signal From Rlys, States Explore Ways To Bring Back Migrants
Quarantine centres, cross-country buses being arranged even as migrants hop on to boats, trucks and ambulances
Centre Allows All Neighbourhood Shops To Open But With Riders
Final call will be taken by local authorities; shopping complexes that draw fewer ‘outsiders’ are permitted to operate
Covid Impact Relatively Muted In India
Compared to Italy and the US, India’s rate of infection spread has been slow. This can be attributed to the strict measures in place
How Global Trade Will Fare Post-Covid
China isn’t likely to lose its pre-eminent position soon. India, for one, will need to make manufacturing globally competitive
How To Curb Harassment In The Virtual Office
Training and sensitisation are essential. Institute a strict dress code and chat etiquette to ensure professionalism during video calls
