Will India Be Able To Combat Corona Wave?
BANKING FINANCE|May 2020
All of us are aware by now the havoc that has been caused by COVID-19 all over the world, especially in Europe and USA. “The worst economic crisis since 2008”, “The FTSE sees its biggest hit since 1987”- intimidating isn’t it? It’s because saying “It’s a setback” and “We will recover” doesn’t gain the media hits that publicising fear does. We recovered from outbreaks ranging from the SARS epidemic to the Spanish flu, the greatest pandemic in modern history. Influenza hit the economy at a time when financial institutions weren’t half as robust as they are today, and even weaker due to World War 1 and the economic catastrophe it caused. But we came through, didn’t we? Expert speculation relies on empirical evidence to the extent that logic and faith is undermined, and it is why such speculation is not a perfectly reliable measure to predict markets and their movement. Hence, in these uncertain times, Lakewater feels optimism is the only tool at our disposal, and it would be rather wise to use it.
Pankaj Singhania
Will India Be Able To Combat Corona Wave?

Introduction

Despite, there was late-onset of Corona wave in India, panic continues to be there. However, looking at certain scenarios, which we shall discuss later in this report, India has a better stand. It is certain that COVID-19 is a classic example of “black swan”; rare occurrence and massive impact. With the widespread of Corona Virus beyond China, there has been a drastic fall in the global equity market, since it is proportionate to sentiments. S&P 500 index showed a decline of ~30 % in 22 trading days from 19th Feb. The fall in the market is at much higher space than SARS (2002); even the 2008 Recession for that matter. Following the USA, India has passed Stimulus packages, in order to lift NIFTY. As on 15th April, NIFTY stood ~8,800.

Outbreak of Corona

The novel Corona outbreak took place in China’s wet market, Wuhan. By December, the virus had expanded and touched every corner of the globe. Looking at the alarming levels of spread and severity, the World Health Organization declared Covid-19 has global risk which required immediate health emergency. Looking from a health perspective, India has done a commendable job by initiating the Lockdown on 25th March to contain the spread. India has learned from its global peers and called out for lockdown at an early stage of outbreak. With a population of ~1.38 billion, India has reported 396 deaths (15th April 2020). India is reporting 0.3 deaths/ million as compared to 79 deaths/million in the USA.

Corona Impact on Economy If we speak about our Economy, recently, we have been facing rough times and the abrupt advent of Covid19 has further amplified the negative sentiment, such as

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