Will the lifting of coronavirus restrictions boost the S&P/ASX 200 Index (ASX: XJO)?
It's quite possible that it may do. For the past two months we've been seeing countries either entering lockdowns or staying in lockdowns. Seeing life starting to get back to normal is obviously a good sign for society.
More people will be out and about. More businesses will be open, meaning more economic activity.
You can easily see the market liking this news and rising in anticipation of the worst being over on the lockdown side of things. There is still a long way to go for the economy to recover. Some industries may be able to open straight away again. Other industries such as international travel could take quite a while to return to somewhat normal.
The ASX 200 has already risen by 17% since 23 March 2020. That's a pleasing recovery so far. It has been driven by shares like CSL Limited (ASX: CSL), Afterpay Touch Group Ltd (ASX: APT) and Macquarie Group Ltd (ASX: MQG).
What happens to the ASX 200 if the coronavirus surges again?
That's the key question isn't it? This crisis is largely being dictated by something we can't control right now, except for social distancing.
If Australia were to see another breakout then would Australia (or individual states) enact the same lockdowns? Would the infection numbers have to be worse than the first phase to enact restrictions again? Will some people push for society to remain open no matter what, for the economy's sake, even if it means a gradual spread of the coronavirus?
There's a lot of unknowns out there right now. A second wave could happen. Or not. If Australia can keep on top of it for the rest of this period then the economic pain may not be as bad as predicted for some areas of the economy.
Investors may stay positive for the next few weeks as restriction lift. But there could be more ASX 200 share market pain to come if infection numbers rise and/or the economy's suffering is deeper & longer than hoped.
