India has recorded the highest number of new COVID-19 cases in a single day anywhere in the world, as well as the highest number of deaths in a 24-hour period. On Thursday (22/4), India reported 314,835 daily cases of COVID-19. The Indian government believes that the country has been through its worst wave since the number of cases started to recede in September 2020, decreasing for 30 consecutive weeks. However, the government was not using this condition to improve the country’s health care structure nor launch an aggressive vaccination program. On the contrary, they have decided to relax by not canceling festivals or religious events before the wave of transmission occurs. Their action to neglect health protocols provoked a rise in the virus transmission rate in mid-February 2021. Apart from the loosening of health protocols, this catastrophe is also caused by the new COVID-19 variant named B.1.617 or also known as “double mutant”. As the name implies, the variant was claimed to be at least at least 20 percent more transmissible, but still has limited data as to whether the mutation is more contagious or deadly. As a result of high transmission rates and low health facilities accommodation, the country has been facing an escalation in positive cases and death rates which leads to further lockdown policy by the government.
As hospitals struggle with beds and oxygen deficiency, banks and securities companies, including UBS Securities and Nomura Securities has prompted to cut their economic growth forecast for India. UBS now estimates growth of 10% from 11.5% in 2021, while Nomura downgraded its forecast from 13% to 12.6%. During April 2021, India's benchmark BSE Sensex has fallen by more than 4%. Whereas, since the beginning of the year, the index had risen nearly 10%, reaching an all-time high on February 16. Those benefits have now been reversed. In recent weeks, Japan, along with India, has been one of the worst performers among major global stock markets. The blue-chip Nikkei Stock Average index of the Tokyo Stock Exchange has dropped over 2% in the last week and is still flat compared to a month earlier. As people traveled for Ramadan, Malaysia's infection rate also reached a new peak this month, leading to government commemoration that the country is on the verge of experiencing a fourth wave. FTSE Bursa Malaysia KLCI Index, the country's key stock index, has given up all of its early-year gains. At 5 PM (4/30), the FTSE Bursa Malaysia KLCI (FBM KLCI) declined 6.85 points to 1,601.65 compared to Wednesday’s (4/28) close of 1,608.50. Meanwhile, a third outbreak of the pandemic has hit Thailand. In April alone, more than a third of the country's total cases were registered, prompting the government to tighten COVID-19 restrictions. However, despite the recent rally in December 2020, its stock market, which dropped 10% last year, has held its ground with investors buying into beaten-down sectors. The protest is set to coincide with the announcement of a Constitutional Court verdict in a case against Prime Minister Prayuth Chan-o-cha. Meantime in South Korea, which has seen the highest number of regular infections since January, has done better, with the number of new cases still under control and vaccines in progress. The Kospi index has risen 6% in March, bringing its year-to-date gains to 11%.
As stated before, Asia’s stock exchange weakened after COVID-19 cases in India has surged. IHSG was also poorly affected, thus dragged into a negative sentiment in regional trade. On Tuesday (4/24), IHSG ended up in the red zone, closing at level 5,959.621 which was declining by 5.2 points (0.09%). About 1.8 million stocks were traded around 840.000 times as transaction value was recorded only at Rp9.4 trillion. The stock exchange resulted in 193 shares strengthened, 300 stocks plummeted, and the remaining 229 still. The mostly affected sectors are those involved in business with India, such as trade, consumption, enterprise, and farming. “The catastrophe of COVID-19 spread in India has potential to clog the export flow, as India is valued as Indonesian products’ biggest consumer,” said Maximilianus Nico Demus, Director of Research and Investment Association Pilarmas Investindo Sekuritas, to Republika on Monday (4/26). Aside from the COVID-19 case surge in India, the continuing decline of Asia’s exchange also coupled with the caused by inflation data in the United States moreover weakened the movement of IHSG. With everything considered, the capital market dynamics are still vastly affected by the ambiguity of the COVID-19 pandemic. What step the authority takes and how people behave in the future would be crucial for improving and recovering the nation's economy and market stability.
What would you like to learn next week? Comment, Like & Share!