Stock markets all over the world have suffered one of their biggest losses in history as the first quarter for the year went amidst a huge sell-off related to the pandemic, coronavirus.
London’s FTSE 100 and the Dow Jones Industrial Average saw their biggest drop this quarter since the year 1987, plunging by 25% and 23% respectively.
20% has been lost by the S&P 500 during the first three months which is the worst ever since 2008.
Authorities have ordered to halt almost all activities so that the spread of the virus can be slowed down and for that specific initiative there has been a drastic drop that is cognizable.
Warnings came from economists that the global economy is likely to be hit in possibly a worse manner than the previous financial crisis. HIS Markit has forecasted that growth will shrink this year by 2.8% in comparison to a drop of 1.7% in the year 2009.
Every country has been affected in some way or the other. The growth of China is expected to sputter by 2% while the growth drop in the UK could be 4.5%. The outlook of countries like Italy and other economies that are less developed is even worse.
On Tuesday, Kristalina Georgieva, the president of the International Monetary Fund said that there are grave concerns about the global growth and the negative outlook that is cropping up in the year 2020 and spoke particularly about the strain that is happening on the downturn that is going to happen on the countries with low income and the emerging markets.
According to an analysis by the Central Bank in the US suggested that the rate of unemployment could rise more than that of 32% in the coming quarter as jobs are going to be lost by more than 47% of people.
According to many global indexes are remaining below by 20% constantly than they were when the year started. Oil prices had a steep slide as the demand dropped and producers are fighting a price war that has a compounding effect on the problems faced by the financial markets.
Massive rescue funds are pledged by the governments that have helped in lifting the share prices these days.
Almost 2% has been gained by FTSE on Tuesday while DAX from Germany and CAC 40 from France has seen more modest gains.
But there has been a stumble in the major US indexes with the Dow dropping by 1.8% and a 1.6% drop in the S&P and almost a drop off in NASDAQ by 1%.
Among this quarter worst performers are the financial and energy firms. Closed stores are seen by retailers as sales have evaporated, as some of the biggest losses are suffered on Tuesday, with Macy dropping by almost 9% every day as it has announced unpaid leave for the majority of its staff.
It has been written by the US Bank Wealth Management analysts that despite financial and monetary stimulus the volatile nature of equities is expected to remain elevated throughout the period for which the COVID-19 impact remains unknown. The depression in the oil prices is here to stay for some time now and visibility of earnings is murky.
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