Stock Markets Drop on Coronavirus Spread
Global stock markets turned gloomy on Monday, as the number of coronavirus cases in Italy, South Korea, Japan, and Iran climbed sharply, darkening the outlook for global economic expansion.
European stocks booked losses early on, with Italy dropping as much as 4% after a fourth victim of the outbreak led to a virtual lockdown in some parts of the industrial north.
That left Milan set for its worst day since 2016. The FTSE MIB was last down by 5.1% following the death of a fifth patient.
Both Germany’s DAX and France’s CAC 40 index shed nearly 4%, while the FTSE 100 slipped 2.5% earlier to wipe off at least $350 billion worth of London’s market value. The index last stood with a 3.4% loss.
In Asia, South Korea’s KOSPI registered a 3.9% fall on Monday, following the country’s high alert announcement. The number of infections in the country inched up to 763 and deaths surged to seven.
Australia’s S&P/ASX 200 also fell by 2.25%, while New Zealand declined around 1.8%. China’s blue-chip CSI300 index ended the session 0.4% weaker.
The poor performance pushed the MSCI’s broadest index of Asia-Pacific shares outside Japan down by 1.9%, its lowest level since early February. Stock trading in Japan took a breather for a public holiday.
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Global Stock Markets Feeling the Weight of the Coronavirus
A lackluster session came as fears over the coronavirus potentially turning into a pandemic that carries a disruptive and fatal impact on world growth prompted stock market players to abandon equities and seek safe-haven assets.
Head of macro strategy Elwin de Groot said everybody sees that this could be another leg down for the economy, and they were already in quite a fragile state to begin with.
It could be another step toward recession in more countries, he added.
The move resulted in the 10-year US Treasury yield hitting 1.377% to mark as its lowest since July 2016, while the 30-year Treasury yield posted a new record low of 1.873%.
There is lots of bad news on the coronavirus front with the total number of new cases still rising, according to chief economist Shane Oliver.
The virus has now claimed the lives of 2,592 people in China, where 77,150 cases have also been reported. The illness has spread to some 28 countries and territories, with the death toll outside China reaching about two dozen, according to data of a London-based news agency.
Of course, there is much uncertainty about the case data. New cases outside China still look to be trending, Oliver stated.
Iran, which announced its first cases in the previous week, stated that they had 43 confirmed infections and eight casualties, with most of the cases located in Qom. Saudi Arabia, Kuwait, Iraq, Turkey, and Afghanistan have already employed travel and immigration limits on the Islamic Republic.
