Oct Thu 2020 07:20:42
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The corona virus has caused an extreme crisis in the world economy. The ADB has estimated that the global economy will lose खर् 4.1 trillion due to the Corona virus epidemic. The ADB has warned that the Kovid-19 epidemic in the United States, Europe and other countries could cause problems for the world economy.
Similarly, the Asian Development Bank (ADB) has projected that Nepal's economy will be limited to 5.3 percent by 2020. But the ADB has projected that the economy will recover in 2021 after the end of the Kovid-19 epidemic and the economic growth rate will reach 6.5 percent.
Therefore, economists have said that this destruction of Corona will also affect the stock market. Due to which stock investors are panicked.
It is in the interest of the general stock investors and the general public that a crisis will arise in the stock market of Nepal. But stock analysts have also said that the crisis in the economy will not have a 100 percent impact on the stock market.
For example
The downturn in the Indian economy in October 2017 had the opposite effect on the stock market. At that time, the stock market had risen by one percent in one day, while the industrial growth rate had fallen by 10 percent in one day.
Even now, the relief package seems to have significantly improved the stock market as India's economy is in crisis due to the corona infection.
The United States has been hit hardest by the corona outbreak, and its economy has been in deep crisis, but the stock market, the Dow Jones, has seen a gradual improvement.
In the case of Nepal itself, the crisis in the economy after the earthquake and blockade in the past had the opposite effect on the stock market and it is estimated that the same will happen after the Corona transition.
Looking at the history of 11 major declines in the US stock market, the stock market has declined even though the economy is strong, while the market has been mixed even though the economy is weak, according to NBC News.
Looking at the severe economic downturn of 2008 after the balloon of artificial growth of real estate burst, the stock market declined for some time but then gradually improved. The Dow Jones Industrial Average fell to 56 percent in 2009 after 17 months, from 1565 points in 2007. Then gradually improved. The practice of applying circuit breaks to prevent the share price from falling too much has intensified since then.
From this point of view, only the policies and action plans taken by the government to improve the economy and capital market determine its future