Market Spice: Week of 23 March

By Delany Higgins 

Market Spice: Week of 23 March 2020 

The outbreak of COVID-19 left few parts of the global economy untouched, with national governments struggling to coordinate swift responses. A multi-trillion dollar stimulus package in the United States, and further measures from governments around the world, spurred equities over the week, leading to record gains. European leaders struggled to reach a consensus on their fiscal response to the outbreak, and China moved cautiously to restart schools and businesses. 

Image Source: Reuters/Aly Song


  • China reported few domestic coronavirus cases, and has shifted its focus to preventing transmission from international travellers. The Shanghai Composite rose 4.2% over the week, and the CSI 300 rose 5.2%
  • China’s National Bureau of Statistics released industrial data indicating that profits of national industrial producers had declined 38.3% for the January-February period compared to the previous year, the steepest decline in over a decade.
  • Tokyo experienced an uptick in coronavirus cases. Japanese Prime Minister Shinzo Abe postponed the Summer Olympics for a year, and worked with his cabinet on a $500 billion stimulus package (about 10% of the country’s GDP). 
  • Japan’s Nikkei 225 closed the week 17.1% up, but still down 18% over the past twelve months 
  • Indian Prime Minister Narendra Modi has ordered a three-week quarantine across the nation. India’s S&P BSE Sensex was down 0.3% over the week, balanced by the U.S. rebound late in the week. Indian Finance Minister Nirmala Sitharaman announced a $22 billion coronavirus stimulus package.
Image Source: Ian Langsdon/AP 


  • European Union finance ministers altered EU deficit laws, enabling countries to increase their coronavirus spending. EU finance ministers also considered the European Stability Mechanism, a reserve bailout fund, but failed to agree on a strategy of execution during a teleconference on Thursday.  
  • The European Central Bank enlarged the circle of bond type purchases included in its €750 billion asset purchase program.
  • European manufacturing and services showed the largest monthly fall since at least the beginning of the century, according to the IHS Markit purchasing managers survey’s index.  
  • The STOXX 600 Europe closed up 6% for the week.  Major European equity indices closed the week up 5-9%. 
Image Source: Anna Moneymaker/NYT


  • On Friday, the U.S. House of Representatives passed a $2.2 trillion coronavirus aid package, which had passed the Senate earlier that week. The measures in the bill include direct cheques to individuals up to a certain income ceiling, extended unemployment insurance funding, and bailouts for businesses and municipalities. 
  • U.S. equities responded well to the fiscal stimulus. The Dow closed the week up 12.8%, the S&P 500 up 10.3%, and the Nasdaq up 9.1%. 
  • On Monday, the U.S. Federal Reserve committed to buying as many government bonds and mortgage-backed securities as would be necessary to keep markets functioning smoothly, launched three emergency lending facilities (two of these for buying corporate debt), and revived TALF, a program funding banks to purchase specified asset-backed securities, among other measures. 
  • The Brazilian Bovespa Index closed the week up 10.3%, despite a worsening domestic epidemic and controversy over President Jair Bolsonaro’s comments on it. 

Cover Image Source: Reuters/Issei Kato

The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.

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