financial market is always a reflection of the state of the economy as it is being believed by the experts so financial market are reflecting the economy in a futuristic way because market participants are always trying to discount various futuristic informations in advance and they will be trying to project the direction of economy movement in advance so, stock market will be a approximate reflection of the moment of the state of the economy.
It has been proven at times because sometime stock market has been exuberant and it has internationally reflected prices in discrimination of its value, but over the period of time in an Efficient market, the prices will be reflective of the true economic status of these countries so it can we say that at the times of the economic recession or even at the time of the pandemic recession, all these economies had been showing a negative downturn and it can be seen that stock market where first to reflect on the decline of the economy, so it can be said that economy will also the declining based upon the stock market performance because stock markets are generally futuristic and it is representing a consensus of a large market participants.
the impact of the decline of economy on the structure of the financial market would be leading to a large number of loss of job and it would also mean that large number of foreign outflows as the foreign nationals will be putting their money out of the economy and it will also mean that there will be a change in the structure of economic growth and it will be projected downside.
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