Corona virus: impact on business and money
Delhi, India: Around 70,000 people worldwide have been infected with the corona virus. Due to this, more than 1800 people have lost their lives in China. The World Health Organisation (WHO) has termed the corona virus as a global health emergency. Symptoms of this virus have been found in about 25 countries. It is also expected to cause major losses in the global capital market. Trade in China has been severely affected due to a sharp drop in demand. Companies in many countries of the world are also not untouched by its impact.
|WTO says,' such outbreaks have a serious |
impact on global economic conditions,.'
The World Trade Organisation (WTO) says that such outbreaks have a serious impact on global economic conditions. China is the largest exporter and second largest importer of merchandise in the world. This is the reason why China is very important in demand and supply.
China is also India's largest trade partner. China accounts for 14 per cent of India's imports. If the situation remains the same for some time in China, the pressure on the markets will increase.
Many sectors will face trouble
There will be some challenge in the near term due to Corona virus. Factories in China are expected to disrupt supply of essential commodities in India as well as many other countries. If conditions remain the same for a long time, it could have a major impact on imports from many countries as it would be a challenge to find an alternative to China in the near future.
There will be huge loss in these sectors
The auto sector is already reeling under huge demand. China accounts for 30 per cent of auto components. In such a situation, there is pressure on the auto sector.
The same is with the pharma sector. India imports 67 percent of active pharmaceutical ingredients from China. Although pharma companies maintain stock for 2-3 months, they are more likely to be affected in the long run.
Benefits in some sectors
The fall in crude prices will have a good effect on companies making paints and plastics. Asian Paints, Berger Paints, Kansai Nerolac and Supreme Industries shares are likely to benefit. Domestic chemical companies can also benefit.