Global markets extend slump as coronavirus crisis deepens

Agence France-Presse

This is AI generated summarization, which may have errors. For context, always refer to the full article.

Global markets extend slump as coronavirus crisis deepens


(UPDATED) 'Stocks are on the back foot once again, with markets tumbling amid continued growth in the coronavirus crisis,' says analyst Joshua Mahony

NEW YORK, USA (UPDATED) – Global stocks tumbled and oil prices collapsed Friday, March 6, 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 Organization (WHO) warned that the epidemic must be taken seriously.

At the close of trade, the Paris stock market was down by 4.1%, Frankfurt dived 3.4%, London shed 3.5%, and Milan tumbled 3.7% 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%.

Oil, already slumping on virus-linked demand fears, extended losses to around 10% as Russia said it had failed to reach an agreement on possible cuts in output at a meeting with the Organization of the Petroleum Exporting Countries (OPEC).

Growing virus crisis

“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.

“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 United States Federal Reserve sprang a surprise half-point interest rate cut on Tuesday, March 3, in an attempt to stem devastating fallout.

As the 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.”

‘This is not a drill’

WHO chief Tedros Adhanom Ghebreyesus, meanwhile, warned that “this is not a drill” as outbreaks surged in Europe and the US, 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.” –

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.

Summarize this article with AI

How does this make you feel?

Download the Rappler App!