WHY STOCK MARKETS HAVE BOOMED IN SPITE OF COVID-19 LOCK DOWNS AND ECONOMIES HAVE DOOMED

 

WHY STOCK MARKETS HAVE BOOMED IN SPITE OF
COVID-19 LOCK DOWNS AND ECONOMIES HAVE DOOMED

 

  The lock downs and stoppage of almost all economic activity except some Pharmaceuticals, Disinfectants and Hospital facilities, had to draw attention significantly towards the speculative trade such as stock markets globally, as people thought they could do it sitting at home as it operates in digital and virtual mode. Individuals and Institutions both were attracted towards the stock markets. Reports say in India 2.8 million retail trade accounts were opened in between the lock down period from March 25 to August 25, 2020. The funds and financial institutions have been focused largely in stock markets as their core activities in physical lending and investment got serious beating. Even news of heavy weight investments whether it is Amazon, Facebook or Google who invested giant amounts in equity of some sectors and companies, pushed the stock market upward significantly. Although it is the retail trade and small investors who are empirically proved to be the losers in always in speculative trades, the more the retail trade activity, the speculative markets get more boost. It has exactly happened in the stock markets during lock downs. To take advantage of such boost, institutions with flush of funds have also engaged too much in the stock markets to push upward to the boom. This situation can’t be sustainable given the nature of the speculative trade as booms and dooms co-exist in stock markets without choice. The retail traders need to be extra cautious as they are the sacrificial goats in all situations and in all times.


About the Author : Dr. Nimain Charan  Biswal is a B.Sc.(Agri. Science and Technology ). M.B.A. and Ph.D.( Management Area ) by qualifications and he has 34+years of work experience in both  industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University ( with Resource Support of IIM-Ahmedabad ). Dr.Biswal is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organisations in Senior/Top Management Capacities. He is a management  expert, a prominent professional of India and known Internationally as well. He lives at Mumbai in India.


Comments

  1. Sandeep GuptaAugust 28, 2020 at 3:00 PM

    Stock markets in India, to a substantially large extent, behave and dance at market maker's tune, than the intrinsic values. The market makers include a nexus of several stakeholders and beneficiaries.

    ReplyDelete

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