Global markets extend slump as coronavirus crisis deepens

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AFP London
Last Updated : Mar 06 2020 | 8:02 PM IST

Stock markets collapsed Friday and oil tumbled on heightened panic over coronavirus and its predicted devastating damage to global economic growth, dealers said.

Haven investments gold and the yen surged as the World Health Organisation (WHO) warned that the epidemic must be taken seriously.

In midday deals, the Paris stock market tanked 4.1 percent, Frankfurt dived 3.9 percent, London shed 3.4 percent, Madrid lost 3.6 percent and Milan tumbled 3.8 percent in a fierce global markets selloff that began about two weeks ago.

With no end in sight to the spreading COVID-19 disease, Tokyo stocks shipped 2.7 percent by the close, Shanghai fell 1.2 percent and Hong Kong erased 2.3 percent on heightened investor panic.

Oil, already slumping on virus-linked demand fears, extended losses to more than 5.0 percent on reports Russia wants to delay deeper output cuts recommended by its OPEC allies.

"Stocks are on the back foot once again, with markets tumbling amid continued growth in the coronavirus crisis," said analyst Joshua Mahony at IG trading group.

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"The stimulus-led rebound in global stocks has been short-lived, with fears over an escalation of the coronavirus crisis providing yet another bout of selling across European markets." While governments and central banks have unleashed or prepared to roll out stimulus measures, the rapid spread of the disease and rising death toll are putting a strain on economies and stoking concerns of a worldwide recession.

The US Federal Reserve sprang a surprise half-point interest rate cut on Tuesday in an attempt to stem devastating fallout.

But as coronavirus continues its rapid spread -- almost 100,000 people in 85 countries have now been infected -- investors are fleeing risk assets such as stocks for financial havens.

"With the economic impact of coronavirus large and rising, policymakers in advanced economies are being forced to react," said economist Adam Slater at research group Oxford Economics.

"But conventional monetary and fiscal options like the US Federal Reserve's recent emergency rate cut, may not be enough."

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First Published: Mar 06 2020 | 8:02 PM IST

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