The Indian stock market under the influence of the novel coronavirus

The world looked coronavirus episode to be a restricted issue for China and thus believed (for long) that any overflow impacts to the remainder of the world could be serenely overseen by a touch of policy restrictions. At the point when it turned out to be certain that the episode was not restricted to the monster and that the monetary impacts would be increasingly broad, gauges were updated down.

The spread of this potential worldwide illness gave birth to a tremendous anxiety amongst the masses. Much like the rest of the world, the investors in India made such low expectations from its market that in spite of comparatively lower cases, Indian market muddled through this situation terribly among its worldwide friends. People are seen withdrawing their stock to get their cash out of the market, or are transferring the same into "more secure" ventures. Indian securities exchange had lost 26 percent in dollar terms between February 1 and April 9, and the same timeline saw a downward graph of 20 percent and 14 percent in the European and US markets.

It is obvious that when the worldwide economy is performing bad no rising economy can grow at its typical pace. Moreover, the Indian economy was pondering its own issues related to the newly made act and to exacerbate the issues, COVID-19 came into play. Our nation saw the real heat of this dragon’s virus on 12th March, 2020 when it witnessed the greatest downfall ever in a single day since 1987. This day also known as the ‘Black Thursday’ also accounted for some 8 percent downfall in Nifty 50.

Experts state that if the lockdown and covid-19 are scaled together, the government-initiated lockdown in a developing country like India, will come out to be a more impactful reason of the sudden decline in the stock market. The three-week complete shutdown across the nation that began on March 24 was extended for some additional days, just when the first lockdown phase was about to reach the conclusion.

Ever since the last quarter of 2018, the Indian GDP was continuously declining. Just when India was fighting its battle against the novel coronavirus, its economy registered a GDP growth as low as 4.5 percent. This economic instability became a significant reason for the constant decline in demand for myriad products in the economy. Not only the demand, but this lower GDP predictions also accompanied lower capital expenditures, highest ever unemployment rates, and much lower exports in the economy.

Almost all the sectors, starting from the automobile (10 percent of the GDP) to the banking and financial institutions, from IT to tourism (9 percent of the GDP) are deeply affected by this recession. Indian economy could not keep itself immune to this crisis because we depend on our neighbouring nations in multiple ways, and a lot of these nations are some of the worst affected nations. The world economies slowed even further (around 35 percent) when they decided to lockdown its markets to ensure complete safety.

Now as the world talks ill of the dragon, and they are being blamed for spreading this deadly virus, it is believed that India might become the next attractive place for companies that decide to take out their businesses from China. But in a situation like this, India’s dear friend is acting as a threat for it, since the United States of America under the leadership of President Trump is firm to claim its position as the world leader, by implementing the ‘America First’ policies.

As of now, no one knows when will our economy rise above this newly ‘gifted’ problem. A significant reason behind the market's unpredictability is its vulnerability. Markets are about desires. Regardless of whether nothing occurs on a given day, stock markets do move if investors anticipate that something is going to happen in the near future. And the mismatch between the expectations and the harsh reality of the market leads to the variations in the market.

The last few weeks have clearly shown that COVID-19 has affected both the two sides of the Indian economy: the supply and the demand. The supply is hindered in light of the fact that plants and workplaces are closed, and yield falls accordingly. Similarly, demand has fallen since buyers are restricted at their homes, with no earning at all thus they had to quit spending. And it additionally appears that this monetary agony will continue for longer than initially evaluated. No one can predict how long will it take for the Indian consumers and businesses to regain their confidence in the economy. It is true that policies implemented by the Central Government and Reserve Bank of India can help the economy heal, but even that will also be restricted. Hence it can be safely