The novel Coronavirus has spread across the globe which has now been declared a Pandemic by the World Health Organization (WHO). The rate at which this virus is spreading is very disturbing to say the least. It had stated in Wuhan, China but as on date the number of affected cases in Italy and US has surpassed that of China! The world marked are spooked and so is the Indian markets. As a measure to contain the exponential rise in the number of cases, the government of India has declared a nation wide Lockdown for a period of 21 days starting 25th of March 2020. Large/medium/small businesses, non-essential item shops, restaurants, malls, most government offices (non-essential services category), constructions, factories, metro services, railways, flights, etc all have come to a halt, which essentially means that the Indian economy had come to a halt. This would undoubtedly impact the earnings of companies and jobs of employed citizens. International rating agency Moody’s has sharply cut India’s growth forecast to 2.5% from 5.3% for 2020 which it had estimated around 10 days ago after the government announced the nationwide lockdown to contain the spread of Coronavirus.
It is said that the stock market always thinks ahead in time. No doubt that even before the lockdown was announced, the market began to hugely sell off as early as February. Today the Nifty has already fallen more than 30% from it peak in January 2020. Many decent quality stocks have fallen as much as 50%. Our central bank the RBI has responded by announcing a 75 bps rate cut to tackle the prevailing crisis situation. It has also conveyed that it will further take an accommodative stance going forward as need be. The government has responded to the current crisis in a humanitarian manner by announcing monetary relief measures pegged at Rs. 1.7 lakh crores for the poor who are the most affected financially due to the current crisis. The ‘Pradhan Mantri Garib Kalyan Scheme’ which will cover around 80 crore poor people across the nation, will include cash transfers and food security.
To fellow readers, I would like to say that at this difficult juncture of entire humanity, let us all take resolve to practice social distancing and pray that a cure or a vaccine emerge soon to steer humanity away from this crisis.