Global stock markets rose on Tuesday after European leaders worked out a deal to support their virus-stricken economies. Shares rose in Paris, Frankfurt and London after a day of gains in Asia, while US futures pointed to gains on Wall Street.
In the 1960s, Japan and Europe exported their way to post-World War II prosperity under the fixed exchange rates of the Bretton Woods agreement. The U.S. went off the gold standard in 1971, but the established way of doing things didn’t collapse. Thirty years later, China essayed the role of being the world economy’s periphery and selling cheap widgets to a revamped core — the West and Japan — with the help of an undervalued exchange rate.
The confidence of many investors got jolted when over Rs 30,000 core of their money invested in trusted debt funds of reputed mutual fund (MF) company Franklin Templeton got stuck indefinitely after the world’s leading fund house on April 23, 2020 announced that it will close six of its debt mutual funds schemes. As such funds are less riskier than the equity funds, people often park their short-term money and even emergency funds in debt MF.
The World Bank on Monday projected the India’s economy to contract 3.2% in FY21 holding that stringent measures to restrict the spread of the coronavirus pandemic will heavily curtail activity in Asia’s third largest economy at a time the global economy is estimated to plunge into its worst recession since the World War II.
Professional forecasters veered towards a consensus that India’s economy will face its worst recession in 40 years, contracting by at least 5% this fiscal, a day before the statistics department releases the March quarter GDP print, which will partially reflect the unfolding impact of the pandemic on the economy.
At a time when the world is grappling with uncertainties surrounding Covid, Bank of America (BofA) Securities has listed out some themes that will play out in the post-pandemic era. The foreign brokerage in its report stated that while the bigger companies would continue to gain more market share, the dislocation in the markets would further accelerate disintermediation of the wholesalers. It also added that new asset owners are likely to emerge in infrastructure and real estate, as liquidity would be tight and lenders would remain cautious.
Billionaire financier George Soros said the European Union could break apart in the wake of the new COVID-19 pandemic unless the block issued perpetual bonds to help weak members such as Italy.