Page 31 - Banking Finance May 2020

ARTICLE

WILL INDIA BE

ABLE TO

COMBAT

CORONA

WAVE?

Abstract

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.

Introduction scenarios, which we shall discuss later in this report, India
has a better stand. It is certain that COVID-19 is classic
Despite, there was late onset of Corona wave in India, the
example of “black swan”; rare occurrence and massive
panic continues to be there. However, looking at certain
impact. With the widespread of Corona Virus beyond China,
About the author 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.
Pankaj Singhania
Founder The fall in market is at much higher space than SARS (2002);
Lakewater Advisors even 2008 Recession for that matter. Following USA, India
too has passed Stimulus packages, in order to lift NIFTY. As
on 15 th April, NIFTY stood ~8,800.

BANKING FINANCE | MAY | 2020 | 31