The Great Depression Part Two? – The Impact of Covid-19 on the Global Stock Market

By Suyeba Aslam

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The end of December 2019, a disease called the Coronavirus (COVID-19) had arisen from Wuhan in Central China to which it had, later on, spread to 216 different countries, areas and territories all over the world- according to the World Health Organisation (WHO) in 2020. Statistics provided by wordmeters.info have shown by the 23rd November 2020, there are up to 59 million cases of coronavirus worldwide with a death toll soaring well above one million people.

By March 11, 2020- WHO officially declared the coronavirus a pandemic. This statement was very detrimental towards the financial marketplace as everything changed ranging from labour markets to global supply chains, consumption behaviours and most importantly the global economy.

As weeks went by, the virus had rapidly caught up and spread towards the western world. The situation had become much more severe and dire when it had come into greater action during mid-April 2020. Society has been impacted in so many ways, especially aspects such as the financial markets. With a majority of import and export coming from China and the rest of Asia- the Asian stock markets had been affected the most with millions of people losing their jobs thus a halt to all kinds of production.

The aftermath of such had later led the European stock markets to also suffer as there was the downfall of equity. Experts had also predicted that during this unforeseeable time the global economy may suffer far worse in comparison to the Great depression. One aspect of the global economy which had been affected the most was the stock market. The reason for this was because of the slow economic growth and lack of financial capital.

As the situation of the virus was worsening and more restrictions were being put into place, there was also a noticeable decline in stocks with Europe. That being travel and energy corporations were among those who were impacted the most as a result of the unforeseen travel bans worldwide. However, with the spiralling news of a potential COVID-19 vaccine being made has sent stock rates to increase dramatically. One of the many potential vaccines that are undergoing tests in this very moment is being created by AstraZeneca and Oxford University.

According to the Financial Times, this had led to the S&P index rising to 0.6 per cent and NASDAQ only increasing by 0.2 per cent. Meanwhile, over the pond in Europe, levels had been constantly increasing and decreasing with stock rates of Stoxx 600 index to be the highest it has ever been since February. In London’s FTSE 100, rates by the end of the day had closed at 0.3 per cent with Germany’s Xetra Dax ending at 0.1 per cent.

All had come into effect as research had shown that the latest Oxford and AstraZeneca vaccine trials had shown an average of 70 per cent effectiveness per candidate. Trials were tested out on one dose per volunteer, in which the success rate of a ‘one dose regimen’ resulted in an average of 90 per cent. Becoming the official manufacturers of a potential vaccine- biopharmaceutical company, Pfizer, and biotechnology company, BioNTech have collaborated to form an RNA vaccine. After being tested on 43,500 people it has been concluded that there is a 90 per cent protection rate from developing Covid symptoms.

With a 90 per cent success rate, it has led shares of Pfizer to increase by nine per cent, as soon as the announcement of its promising estimate of success. It is possible if the vaccine is put into effect very soon, it has the potential to recover all stocks and indices that have been heavily impacted by the pandemic since March 2020.

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