March 25: Assessing the longer-term financial impact of the coronavirus spread worldwide now hinges on the success of lockdowns in containing the pandemic and trillions of dollar of support in easing the burden, Reuters reported.
According to the news agency, such steps would limit the duration of the deep freeze and hasten any rebound.
Since the virus exploded beyond China in early March - triggering shutdowns of the biggest economies in the world - financial markets have gone into tailspin. Stock markets lost almost a third of value, volatility spiked, credit stress soared and a dash for dollar cash worldwide amplified the anxiety, according to a news report published by Reuters.
“That shock has been met with a rapid and unprecedented pushback from economic policymakers, pledging trillions of dollars to ensure containment efforts do not lead to permanent fracture of both the economy and markets that keep it moving,” the report further said.
The news report says investors now need to assess whether, like China, draconian lockdowns work in stopping the virus and so limiting the length of the deliberate sudden stop in activity to the second quarter. And, in the meantime, whether gigantic government rescue programmes can prevent markets crystallizing crises of their own by choking funding, forcing bankruptcies and mass unemployment.