It has been a rocky start to the year for stockmarkets this year as the threat of COVID-19 first announced in December 2019, became an official pandemic and caused chaos to stockmarkets, the worst since the Global Financial Crisis.
Coming off the devastation caused by the bushfires over the summer which dented Australia’s economy and led to a dearth of tourists in the peak summer season, the combination could tip Australia into a recession.
At the time of writing (19 March), there had been 568 cases of coronavirus confirmed in Australia and six deaths. However, Australia was far less affected than other countries such as China and Italy where cases and deaths were well into four figures and global cases reached 214,000.
The panic caused by the virus was hitting stockmarkets, commodity prices, the oil market and investors’ portfolios. The ASX 200 had fallen 25% since the start of the year, compared to returns of 11% for the same time last year.
Meanwhile, US and UK markets were reporting some of their biggest falls since 2008 with one-day falls of 10%-12%.
The ASX 200 reached a record high of 7,784 in mid-February and has been falling ever since but managers pointed out there were several causes that had been hindering the market’s progress. These included falling retail sales, soft underlying growth and the bushfires over the summer. They also pointed out the market was overdue for a correction given how quickly it...