Markets from Italy, Australia, the US, and South Korea plunged on Monday in one of the most concerted selling waves seen since late 2018 as previously complacent investors finally awoke to the dangers posed by the coronavirus crisis in China that now seems to have broken out into Europe, other parts of Asia and Europe.
The COVID-19 virus is no longer is it just a ‘China’ concern’ now its very much global after rapidly growing outbreaks in Italy, Iran and South Korea showed the infection now threatened the world economy.
Markets plunged – more than 5% in Italy, over 3% in London and the US which saw losses of mow than 3% with the Dow now down for the year.
The Dow in fact ended around 1,031.16 points lower, a drop of 3.56%, to end 27,960.80.
It was the third-biggest point loss for the Dow in history and left it down 2% for the year to date.
The S&P 500 fell around 111.85 points or 3.35%, to end near 3,225.90 while the Nasdaq Composite slumped 355.31 points, or 3.71%, to finish at 9,221.28.
Now big falls are threatened in Asia today – The ASC is staring at a 168 point plunge at the opening on top of Monday’s 160 point slump (or 2.25%).
Gold rose sharply, again, oil, copper and iron ore dipped. The Aussie dollar remained above 66 US cents in early Asian dealings on Tuesday after touching a new 11 year low of 66.84 in late trading in Asia on Monday.
Bond yields fell around the globe on fears the breakout of the virus will damage global growth. The yield on the key US 10 year bond fell to 1.355%, near its all-time low of 1.32% in 2016.
It was trading around 1.37% in early Asian dealings. The 10-year bond yield on Australian government debt fell to 0.91% on Monday, down from more than 2% a year ago.
Barely any stocks across the Stoxx Europe 600 index were positive as that index fell nearly 3.8% for its biggest single-day drop since 2016.
Italy bore the brunt of selling off the rout in equity markets, where the FTSE MIB Italy dropped nearly 6% as that country locked down wide parts of its northern region in a bid to stem the continent’s first major coronavirus outbreak.
Iran has reported 50 deaths and hundreds of cases since late last week and is now becoming isolated from countries across the region have banned travel to and from the country.
London was off 3.3%, France and Germany slumped 3.9% and 4% respectively.
Gold futures jumped to a new multi-year high of $US1,691 an ounce before easing back to settle up $US27.80, or 1.7%, to settle at $US1,676.60 an ounce on Comex in New York.
But those gains were cut sharply in early Asian dealings and the price fell to around $US1,661 an ounce. Monday’s settlement was the highest since February 2013.
Oil futures sold off heavily on Monday – West Texas Intermediate crude for April delivery, fell $US1.95, or nearly 3.7%, to settle at $US51.43 a barrel in New York Mercantile Exchange.
In Europe, April Brent crude the global marker, lost $US2.20, or 3.8%, to end at $US56.30 a barrel.
Copper fell as well, down 1.5% to $2.5720 a pound. Iron ore dipped 37 cents to $US91.88 a tonne for 62% Fe ore delivered to northern China.
