NE NEWS SERVICE
LONDON, FEB 29
Coronavirus panic sent world share markets skidding again on Friday, compounding their worst crash since the 2008 global financial crisis and pushing the week’s wipeout in value terms to $5 trillion (Rs 363 lakh crore).
The rout showed no signs of slowing as Europe’s main markets slumped 3-5% and the ongoing dive for safety sent yields on US government bonds, seen as probably the securest asset in the world, to fresh record lows. Hopes that the epidemic that started in China would be over in months and that economic activity would quickly return to normal have been shattered this week as the number of international cases spiralled.
Bets are now that the Federal Reserve will cut US interest rates as soon as next month and other major central banks will follow to try and nurse economies through the troubles and stave off a global recession. “Investors are trying to price in the worst case scenario and the biggest risk is what happens now in the United States and other major countries outside of Asia,” said SEI Investments Head of Asian Equities John Lau. “These are highly uncertain times; no one really knows the answer and the markets are really panicking.” Disruptions to international travel and supply chains, school closures and cancellations of major events have blackened the outlook for a world economy that was already struggling with US-China trade war fallout.
MSCI’s all country world index, which tracks almost 50 countries, was down more than1% ahead of US trading and almost 10% for the week, the worst since October 2008. Wall Street shares plunged 4.4% on Thursday alone, their largest fall since August 2011. Europe’s airlines and travel stocks have plunged 18% in their worst week since the 2001 9/11 attacks in the US. The CBOE volatility index, often called the “fear index”, jumped as high as 47, its highest in about two years, well out of the 11-20 range of recent months.
Oil prices languished at their lowest in more than a year having plunged 12% this week – the worst since 2016 – while all the major industrial metals have dropped between 3% and 6%.
World Health Organization Director General Tedros Adhanom Ghebreyesus said the virus could become a pandemic as the outbreak spreads to major developed economies such as Germany and France.
Indian shares sink for sixth straight session
Indian shares sank on Friday for a sixth straight session, capping their worst week in more than a decade, over fears of global recession. Asia’s third-largest economy grew 4.7% in the December quarter from a year ago, slowing from the previous quarter, but analysts have forecast a bumpy March quarter on growing fears of a global pandemic.
The broader NSE Nifty 50 index ended 3.71% lower at 11,219.20 and the benchmark S&P BSE Sensex fell 3.4% to close at 38,383.32. For the week, the Nifty 50 index shed 7.3%, while the Sensex dropped 6.8%, their worst decline since the 2008-09 financial crisis.
Death toll rises to 34 in Iran
Death toll due to COVID-19 has risen to 34 in Iran, by far the highest number outside China. The government revealed the virus had affected total of 388 people, including Masoumeh Ebtekar, vice-president for women and family affairs, and Deputy Health Minister Iraj Harirchi. All schools in Iran will close for three days starting from Saturday.
Pet dog quarantined in Hong Kong
A pet dog was quarantined at an animal centre in Hong Kong after it tested positive to low levels of the new coronavirus, in the first such case in the city. As it belongs to a 60-year-old infected woman, officials believe results were positive due to “environmental contamination of dog’s mouth and nose”.
Five nations report first cases
The rapid spread of coronavirus raised fears of a pandemic on Friday, with five countries reporting their first cases. As the outbreak eased in China, Nigeria, Estonia, Denmark, Netherlands and Lithuania – all with travel history connected to Italy – reported infections.
Mongolia, which has yet to confirm a case, placed its president, Battulga Khaltmaa, in quarantine as a precaution after he returned from a trip to China. – Courtesy: Agencies
