AFP/ Hong Kong
Asian and European equities spiralled downwards yesterday, extending a collapse in world markets that has wiped trillions of dollars off valuations as the coronavirus spread rapidly around the world with the WHO warning the deadly epidemic was now at a “decisive point”.
Tokyo, Shanghai, Sydney, Singapore and Seoul were among the bourses that fell more than 3% while Jakarta was hammered more than 4%.
The casualties have put equities around the world on course to record their worst week since the global financial crisis more than a decade ago as investors run to the hills on fears the virus will smash the global economy.
And while the panic has already caused a bloodbath on trading floors, there are warnings there could be worse to come.
The Dow suffered its biggest points loss on record, shedding almost 1,200 points, while its 4.4% drop marked the worst performance in two years.
The S&P 500 and Nasdaq also tanked more than 4%.
The VIX “fear” index is now at its highest level since 2011 during the European debt crisis.
President Donald Trump blamed the market plunge on the media coverage of the coronavirus and worries about Democrats winning the White House race.
The heavy selling came as authorities in California said they were monitoring some 8,400 people for Covid-19 after officials confirmed a woman had contracted it without travelling to any of the outbreak-hit regions.
“Even though the market is pricing in the fear of economic issues and disease hitting the US, we haven’t actually seen the emergence of clusters” in the US, Steve Englander of Standard Chartered told Bloomberg TV. “Once that happens we will see another sell-off.”
After Thursday’s battering, Asia picked up the baton. Tokyo tanked 3.7%, Shanghai dived 3.7%, Seoul gave up 3.3% and Sydney dropped 3.3%.
Hong Kong retreated 2.4%, while Singapore sank 3.1%, Jakarta dived 4.1% and Bangkok lost 3.4%. Manila eased 2.5%, with Wellington 1.5% in the red.
In early trade, London, Paris and Frankfurt each plunged 3.3%, having all lost more than 3% on Thursday.
The losses have seen many markets lose around a tenth of their value in just a week.
The rush to safety has also seen the dollar surge against most higher-yielding, riskier currencies, with the New Zealand dollar, the South African rand and the Russian rouble all more than 1% lower.
Australia’s dollar, the Indonesian rupiah and the Indian rupee were also sharply down.
But the dollar was well off against the safe-haven yen.
The virus has now killed 2,856 people and infected more than 83,000 worldwide, with an increasing number of new cases being reported each day.
Lithuania, New Zealand and Nigeria yesterday reported their first cases, as officials around the world move to contain the outbreak in their countries as fears of a global pandemic grow.
The operator of Tokyo’s Disneyland and DisneySea closed the parks for around two weeks.
Japan and Iraq have also ordered the closure of schools.
World Health Organisation boss Tedros Adhanom Ghebreyesus said on Thursday the world was at a “decisive point” and countries could still contain the epidemic if they “act aggressively now”. “No country should assume it won’t get cases; that could be a fatal mistake, quite literally.
This virus does not respect borders,” Tedros said in Geneva.
The rate of increase in China continues to fall and there are signs the country is slowly creaking back to life with shops reopening, including Starbucks, which has resumed operations at all its outlets.
But Moody’s Analytics said the regional economy faced severe repercussions.
In Tokyo, the Nikkei 225 closed down 3.7% to 21,142.96 points; Hong Kong — Hang Seng ended down 2.4% to 26,129.93 points and Shanghai — Composite closed down 3.7% to 2,880.30 points yesterday.
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