Paradox of Stock Market Boom Amidst COVID-19 Pandemic : An Indian Perspective in Global Context

The World Health Organization (WHO) declared the novel coronavirus spread as a public health emergency on January 30, 2020, and a pandemic on March 11, 2020. The virus has been a major public health issue internationally; around 186.5 million cases have been reported, out of which 4.03 million resulted into deaths as on July 10, 2021. India is also badly affected by the coronavirus with 30.8 million cases and around 407,000 deaths as on July 10, 2021. With affecting public health, the virus had a huge impact on the economies, globally. Companies either ran into losses or had to be shut, many people lost their jobs and consequently unemployment grew across the economies of the world, and poverty increased as many people fell in poverty due to deep recession triggered by the pandemic. India’s real GDP during 2020-21 fell by 7.3% as compared to 4% increase during 2019-20 (NSO). The fall of economy was very much expected and it indeed happened, but the stock market strangely didn’t follow the economy. Taking BSE Sensex as an example, on March 24, 2020, the day of announcement of first lockdown in India, it closed at 26,674.03 which, within a year rose up to 49,180.31, even though the pandemic kept getting worse and the economy had no drastic improvement, and this has continued as Sensex averaged a closing price above 50,000 in the month of June 2021 (BSE). The myth of the stock market being a barometer for the real economy has already busted