In 2019, the first case of Novel Coronavirus, a human transmitted disease, was first detected in the Wuhan city of China. Soon it spread all over the world and brought an international emergency by March 11, 2020. It being a human transmission disease there was no other way to stop the spread except by enforcing lockdown which gradually increased in different magnitudes. Governments were struggling to get together economical and medical aids for their residents. With such measures being taken, the economy all over started to fall and in turn affecting the stock market. The performance of the stock market started to fall and hit all time lows, bringing in a stage of panic.
But soon after a V shaped recovery was noticed in the performance of the stock markets where the economy was still falling. There are several reasons behind the recovery that can be discussed: lower interest rates, foreign investments, investors psychology, Robinhood effect etc.
The falling market was mindfully saved by the governments and central banks by bringing in various fiscal policies and increasing the stimulus of liquidity. This increased the foreign investment in the capital market. Investors psychology plays a very crucial role in setting the stock market psychology. Once the investors started feeling that the company’s performances were not falling they again started investing and in more amounts to get better returns. While the old investors started to regain control of the market, new investors, in huge numbers, started to invest with the surplus money they had in their hand with nowhere to spend, giving rise to the robin hood effect.
All business organizations are now experienced with the unpredictability of the Market. “The Market is currently supported by Global sentiments and Liquidity” said by a well-known economist. Other than Indian Economy, Very few other countries have almost opened up their economies which is the main reason to thrill the indian market directly or indirectly.
Author Details:
Name: Ankika Sahoo
Batch: 2020 – 2022
Linkedin - https://www.linkedin.com/in/ankika-sahoo-05b564137
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