Coronavirus Impact on the Stock Market is the most talked news recently. The recent crash in the stock market is attributed to the coronavirus. However, it is not true. The coronavirus Impact on the Chinese Stock Market has not felt i.e. the country which is most impacted by the coronavirus. After the holidays, the Chinese stock market gave a knee jerk reaction but recovered sharply.
The history of stock market crashes in India suggests that none of them was attributed to any virus or epidemic. However, all the crashes were linked to stress on the financial sector or the stock market scams. Currently, the two key concerns of the financial sector are NPA's and corporate debt. From 31st Mar 2020, the stressed assets of small and medium enterprises will be reported which can show a clear picture of NPA's or stress on the banking system.
If you correlate the movement of the market with the outbreak of any disease/epidemic/virus, you will observe that in the global scenario, out of 10 instances, the stock market delivered positive returns in 7 cases and only in 3 cases market fell.
As per the WHO or World Health Organization website, there were 11 instances in India. Out of 11 times, the stock market went up 9 times and went down only 2 times. Even in the case of SARS that has a major impact on India, the stock market rallied.
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