HYDERABAD: Global markets are on the dragon’s tail with Sensex to S&P, Dow Jones to Nikkei seeing a Friday bloodbath with fears of the novel coronavirus becoming a pandemic.
In other words, we are staring at a clear and present danger causing severe human and economic upheaval, but are ill-equipped to contain the calamity.
More than the US-China trade war stabbing economies in the back, the virus that came out of nowhere is twisting the knife straight up and deeper into the global being, stoking recessionary fears.
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Bank of America believes the global economy will see its weakest year since the peak of 2008 financial crisis, while ratings agency Moody’s says the pandemic may trigger global and US recessions in the first half of the year.
Back home, Finance Minister Nirmala Sitharaman admitted the outbreak would be a challenge if India fails to resolve all economic issues stemming from it within the next three weeks.
With the pharma and the electronics industries fearing critical shortages in the shipping of raw materials and components from China, the sectors have suggested airlifting them instead, the minister pointed out.
India is also looking at alternative supply lines but the cost for doing so is on the higher side.
Pessimistic predictions are proving costly for global markets, which too are headed for the worst week since the 2008 crisis, crashing 10 per cent with the week’s wipeout touching $5 trillion.
In India, traders lost a whopping Rs 5 lakh crore in an hour after the market opened on Friday. In all, Sensex shed 1,448 points, recording its biggest one-day decline since August 24, 2015.
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On a weekly basis, it slipped around 7 per cent, which is the worst weekly fall in 10 years.
Japan’s Nikkei was down over 4 per cent, Hong Kong’s Hang Seng 2.8 per cent, Korea’s Kospi 3 per cent and Shanghai composite lost 3.8 per cent — the worst week since 2008.