Investors know they need to brace themselves for bad times when a central bank announces a large and unscheduled cut in interest rates to protect economic activity. In March, the US Federal Reserve announced half a percentage point cut in rates—its first and sharpest since the 2008 slowdown—to support their economy from the novel coronavirus (Covid-19).
The concern is not unfounded as Americans are China’s largest consumers. Other countries, too, are worried because China accounts for 15.1 percent share of the world’s GDP. When the last epidemic, Severe Acute Respiratory Syndrome (Sars) hit the world in 2003, this figure stood at just 4 percent.
Global equities—particularly the Dow Jones index’s record fall of 1,190 points on February 28—echoed the nervousness caused by the outbreak. There is a clear financial panic for the first time since the global meltdown of 2008. It is evident that companies across the globe, particularly those that depend on sourcing raw material or technology from China, will face a tough business cycle in the coming months.
And India is not an exception. About 18 percent of India’s merchandise imports (worth $85 billion) come from China, with everything from consumer durables, electronics and select auto components to sea food, solar panels and some pharmaceutical bulk drugs highly dependent on imports from China. India’s benchmark 30-share Sensex index has fallen 9.68 percent and the Nifty 50 10.3 percent year-to-date. Volatility, through the India VIX index, has also risen in this period, led by the weakness across global equities (see chart).
UNCERTAINTY PREVAILS
Denne historien er fra March 27, 2020-utgaven av Forbes India.
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Denne historien er fra March 27, 2020-utgaven av Forbes India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Home-Cooked Meal Is Now Greatly Valued
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Paytm 3.0 - Reaching Near Breakeven In Two Years
As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term
DIGITALISATION WILL HELP IN VALUE CREATION
As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India
Industry 4.0: Climate Revolution?
Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent
EV Dream Still Miles Away
Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure
Living Waters
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