This rollercoaster of a year has been remarkable for its unpredictability in several areas, including global stock markets. The Covid-19 pandemic precipitated the worst crash in a generation, yet stocks have powered to record highs, boosted by vaccine breakthroughs and unprecedented stimulus measures.
At least 1.7 million people have died from the coronavirus and a global recession sent unemployment rates skyrocketing. Yet, world stock markets are ending the year up 13 per cent, despite further lockdowns necessitated by the latest surge in cases.
Timeline Of Events
There were indicators that this was going to be a strange year right from the start. The killing of the Iranian general Qassem Suleimani by a US drone sent oil prices higher and markers lower. While the world was still reeling, early reports of the coronavirus from Wuhan began to make the rounds.
By mid January, Beijing’s stock market had plunged 8%, its worst in over four years. When a seriously hit Italy imposed her lockdowns, Europe’s worst stock market meltdown in decades was triggered, sparking severe financial turmoil.
Heavy falls were recorded in February and in March, the UK’s FTSE 100 suffered its worst day in 12 years, quickly followed by London and New York. The pound also took a hit, falling to its lowest level since 1985.
The Turning Point
The slide was arrested quickly and decisively, however, through the collective efforts of central bankers and governments. Even as the COVID-19 crisis raged on, the financial sector began to find itself in rude health.
Huge stimulus programs helped the markets recover much faster than the real economy. During this period, global markets staged a rapid rebound, catching most analysts by surprise. By the summer, economies were emerging from their deepest recessions and attention soon turned to recovery.
Biden’s victory, and news of a successful vaccine trial by Pfizer capped a successful turning point for global stock markets.