How Global Finance has been Affected by Covid19?

How Global Finance has been Affected by Covid19?

By Jonny Pean | etradingbook | 22 Aug 2020

It has been over half a year that the coronavirus has disrupted everything that we knew as 'normal'. Not only human lives & livelihood have been severely affected, but also the pandemic has taken a massive toll on the world economy & global finance with equal intensity. The whole world has almost come to a standstill because of the restrictions in force. GDPs have been heavily impacted & per capita incomes have deteriorated. Not only the US but European as well as Asian countries and all others have seen economic contractions and mass unemployment rates skyrocketing. The impact of Covid-19 has been gigantic on financial markets, which is nothing that we have seen in decades. The financial fallout is already evident and in ardent need of speedy recovery. 

Stock Market Crash 2020

As the pandemic started hitting the world hard, the global stock market became highly volatile. In February, in the week from 24th to 28th, the stock market started to show record decline which was the largest single week decline and it happened to be so for the first time since the financial crisis of 2008. And eventually in March, due to the global economic shutdown, it caused the stock market to crash. March 9th became the Black Monday as due to the pandemic, the global market showed severe contractions.

The global stock indices crashed to their lowest in a single day. It was like the Black Monday of October 1987. Then again on Marth 12th which was referred to as the Black Thursday, the US market suffered the greatest single-day percentage fall since the 1987 market crash and became the worst hit market. The stocks in Europe & North America also witnessed a fall of over 9 percent. The Asia Pacific & European stock market closed on March 16th setting a one-day record fall, and the US market indices fell by more than 12 percent thus marking the day to be Black Monday II. All this while, on the one hand, the oil prices drastically decreased and on the other hand, there is an increase in the price of gold, which keeps on getting record high.

The aftermath of the Fallout

As a result of all these, the long-term economic & financial growth is likely to be dampened. What we need is a good set of policies & counter-measures to prevent bankruptcies & shutdowns of businesses and handle the probable vulnerabilities with proper fiscal resources. To counteract the economic blow, banks & financial institutions are coming forward to help with amended policies and slashed rates. In most countries, the respective government has announced different fiscal stimulus measures to balance the impact of the economic fallout. Results of some polls & surveys show that this steep decline in the global economy will recover in a U-shaped manner. Major monetary support from the governments is needed to stabilize the current scenario worldwide. What is going on all around is a long-term crisis and nothing is certain as to how long the situation will continue to be like this.

Whether it will worsen in the days to come by or we will be able to fast track the recovery process, is still a huge lingering doubt in all minds. However, the prospect of not one but several vaccines has been welcome news for the market and it has shown signs of mild recovery. With any luck, 2021 might prove to be a better year than its predecessor. 



Jonny Pean
Jonny Pean

I am working as a commodity analyst since 2014 and by now I have gained 5 years of experience in dealing with the technical and fundamental aspects of the stock market.


Avik Aka Jonny has been working as a commodity analyst since 2014 and by now have gained 5 years of experience in dealing with the technical and fundamental aspects of the stock market, interest rates, and foreign exchange markets.

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