Hydroxychloroquine...driving the markets?

With the face of an exploding pandemic and with a frightening death toll, Global Stock Market has seen its worst fall in recent times.  While many countries announcing Lockdown and an "emergency", one would expect the market to fall down more... but in contrast, the Global Stock Market is on its reversal phase. 

The question here is, who is driving the market to its BULLISH TREND when the cities are in complete lockdown,  economic growth is halted, no cure on coronavirus, no control over positive cases and the rising death toll in Europe, USA, and Asia.

Let's Compare the Indian market during the entire COVID -19 Situation from Jan 2020 to Present Day.

Indian Market (nifty index) was trading at its all-time high at 12500 levels in the month of Jan 2020 to its lowest at 7500 on 22nd March 2020. a rally of 5000 points in less than a  month. All Global Indices fell down sharply at the same level.

US equity indices have rallied 25 percent from the recent lows even as the Coronavirus cases in the country topped the 400,000 mark, most by any country.

What more important here is the driving force or factor which is responsible for this V-shape recovery, which is currently recording a fresh High every day 

1st Factor - Relief PACKAGE...

Senate approves historic $2 trillion stimulus deal amid growing coronavirus fears: March 25 - recovery started...

The legislation represents the largest emergency aid package in US history and the most significant legislative action taken to address the rapidly intensifying coronavirus crisis, which is grinding much of the economy to a halt. 

2nd Factor and the most important - The DRUG...

People are desperate for a bit of hope, a chance to believe there is something that will help. the Drug that has received the most attention is hydroxychloroquine, which president trump has recommended repeatedly. despite warnings from his own health official that there is little data, ti supports its widespread use as a treatment against the virus. 

What is hydroxychloroquine?

It is a prescription medicine that was approved decades ago to treat malaria, it is also used to treat autoimmune diseases.

Trump mad this first endorsement of hydroxychloroquine on 19th March 2020. Export control, shortages and scientific recrimination rapidly ensued, but the controversy could not extinguish the power of presidential endorsed hope. 

Across the globe and throughout diverse communities on the internet, the drug had been appointed the miracle cure for COVID-19.

Reports from doctors in China and France have said that the Drug combined with the antibiotic azithromycin, seemed to help patients, but those studies were small and did not used a proper control group.

Doctors hope hydroxychloroquine might calm the condition, sometimes called a cytokine storm, but so far there is no proof that it has that effect.

But it's stimulus backed by powerful presidentship were enough to drive the market backed up by a feeling of HOPE...

As for TRUMP, it does not appear likely that he will stop hyping the drug anytime soon, nor that he will take responsibility if anything goes wrong. but it is certainly helping the Stock market to recover from its fall.

" What do you have to lose?" he said on Sunday.

If it does work, it would be a game if we didn't do it early, I have seen things that I sort of like, so what do I know?

"I'm not a doctor"

President Donald Trump's statement indicating possible retaliation in case India refuses to supply hydroxychloroquine has sparked a diplomatic debate amid the global novel coronavirus pandemic. Hydroxychloroquine, which is used to prevent or treat malaria, is being looked at as a drug that could possibly relieve COVID-19 symptoms and help in the treatment of novel coronavirus patients.

India is one of the major global suppliers of HCQ and already has pending orders from countries including the US. A hoarding of HCQ at this moment, when positive novel coronavirus cases here are much lower than other countries, may result in late access to ample supplies of the drug.

Plus, there is hope for a fiscal stimulus package after RBI’s record rate cut

"world and the global markets are driven on HOPE..."