Global markets extend slump

Facebook
X
WhatsApp
Telegram
Email
Closing prices on world stock markets.

LET’S READ SUARA SARAWAK/ NEW SARAWAK TRIBUNE E-PAPER FOR FREE AS ​​EARLY AS 2 AM EVERY DAY. CLICK LINK

NEW YORK: Global stocks tumbled and oil prices collapsed Friday as investors panicked over the expected damage of the coronavirus to global economic growth.

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

At the close of trade, the Paris stock market was down by 4.1 percent, Frankfurt dived 3.4 percent, London shed 3.5 percent and Milan tumbled 3.7 percent in a fierce global markets selloff that began about two weeks ago.

Wall Street stocks also suffered another bruising session, with petroleum producers and banks especially hard-hit, as the S&P 500 ended down 1.7 percent.

Oil, already slumping on virus-linked demand fears, extended losses to around 10 percent as Russia said it had failed to reach an agreement on possible cuts in output at a meeting with OPEC. 

“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.

See also  Coca-Cola Bottlers Malaysia appoints Tolga Cebe as new CEO

“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 are 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.

As coronavirus continues its rapid spread — more than 100,000 people in 92 countries and territories 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.”

See also  Apple moves toward reinvention, again

WHO chief Tedros Adhanom Ghebreyesus, meanwhile, warned that “this is not a drill” as outbreaks surged in Europe and the United States, where medical workers warned of a “disturbing” lack of hospital preparedness.

With dealers flocking to safety and yields on US Treasuries at record lows, gold has rocketed multi-year highs.

In oil markets, prices dived after Russia said that no agreement had been reached with producers in the OPEC cartel over possible cuts in output to prop up demand.

“Over the past month, forecasters have slashed their oil price estimates quicker than you can say ‘pass the hand sanitizer’,” said PVM analyst Stephen Brennock.

“In short, COVID-19 is in the midst of an international offensive and the worst effects are yet to be felt. Global oil demand destruction is therefore poised to intensify.” – AFP

Download from Apple Store or Play Store.