Australian share market shows improvement to end 2020
January 14, 2021
The last quarter of 2020 saw the Australian Stock Exchange (ASX) improve another 10 per cent, rounding out a volatile year on the Australian market.
The share market started the year well and continued to gain further over the first two months despite COVID-19 becoming an emerging issue overseas.
The reality of the pandemic and its economic implications hit the market in March, resulting in decline of nearly 40 per cent – deemed one of the fastest falls in history, and certainly defining a crash.
The stock market then improved quite quickly and recovered much of the losses by early June 2020.
As the economic impacts of COVID-19 were still being felt, and the outlook remained very uncertain, many market observers considered the recovery premature and that the market would likely fall again and potentially retest the lows of March.
Much to the surprise of many investors, the share market largely retained the rally over the following months as focus shifted to Australia’s largely successful containment of the virus and the large amount of government stimulus used to cushion the blow.
The earnings reporting season in August 2020 wasn’t as bad as some had feared and this, combined with the development of vaccines, helped investors to look towards more promising times ahead.
The curtains were drawn on 2020 with the market declining just 1.5 per cent over the calendar year. While this is not a good outcome, it was a better ending than many had feared or expected.
Investors are now looking towards 2021 with the hope of a better year for the economy and the share market.
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