AFP – Global stocks were hammered Monday and gold prices soared on safe-haven buying as fears mounted that the new coronavirus would derail economic growth.
Equity bourses were a sea of red, including in Milan and Seoul — two countries outside of China that have suffered outbreaks of the virus in recent days.
In the US, the Dow plunged more than 1,000 points in its worst session in more than two years.
“The market reaction is a classic ‘sell now and ask questions later,'” said Quincy Krosby, chief market strategist for Prudential Financial, who said the selloff reflects fears the virus will dent earnings growth.
Oil prices tumbled on worries about demand, while gold prices on the London Bullion Market spiked to $1,689.31 per-ounce, a level last seen in January 2013, before easing back somewhat as investors sought the precious metal as a safety measure amid the market turbulence.
Investors have been unsettled by the spread of the disease, analysts said.
Italy reported its seventh death from the coronavirus, but officials called for calm and reported the number of infections slowing after a spike over the weekend.
South Korea’s K-league postponed the start of the new football season as a leap in cases wrought havoc across its sporting calendar.
Meanwhile, the World Health Organization said the new coronavirus epidemic had “peaked” in China but warned that a surge in cases elsewhere was “deeply concerning” and all countries should prepare for a “potential pandemic.”
US President Donald Trump on Twitter said the virus “is very much under control in the USA,” adding that “stock markets are starting to look very good to me!”
Trump’s comments aimed to encourage bargain-hunting after major US indices ended down more than three percent, with all 11 industrial sectors tumbling.
Earlier, European stock markets were a sea of red, with Frankfurt and Madrid falling by 4.0 percent, Paris shedding 3.9 percent and London losing 3.3 percent.
“The root of the problem is this: there is burgeoning fear that the shutdown effect that has hit China’s economy is going to take over elsewhere, dealing another blow to global growth, and earnings growth prospects,” commented Patrick O’Hare at Briefing.com.
Travel and tourism linked firms were particularly vulnerable, with Sydney-listed airline Qantas plunging more than seven percent, and Air China off by nearly six percent in Hong Kong.
An exception was Gilead Sciences, which surged 4.6 percent following upbeat comments from a World Health Organization official about the company’s remdesivir, an experimental drug to treat the virus.
– Key figures around 2200 GMT –
New York – Dow: DOWN 3.6 percent at 27,960.80 (close)
New York – S&P 500: DOWN 3.4 percent at 3,225.89 (close)
New York – Nasdaq: DOWN 3.7 percent at 9,221.28 (close)
Milan – FTSE Mib: DOWN 5.4 percent at 23,427.19 (close)
Madrid – IBEX 35: DOWN 4.1 percent at 9,483.50 (close)
London – FTSE 100: DOWN 3.3 percent at 7,156.83 (close)
Frankfurt – DAX 30: DOWN 4.0 percent at 13,035.24 (close)
Paris – CAC 40: DOWN 3.9 percent at 5,791.87 (close)
EURO STOXX 50: DOWN 4.0 percent at 3,647.98 (close)
Seoul – KOSPI: DOWN 3.9 percent at 2,079.04 (close)
Shanghai – Composite: DOWN 0.3 percent at 3,031.23 (close)
Hong Kong – Hang Seng: DOWN 1.8 percent at 26,820.88 (close)
Tokyo – Nikkei 225: Closed for a public holiday
Brent Crude: DOWN 3.8 percent at $56.30 per barrel
West Texas Intermediate: DOWN 3.7 percent at $51.42 per barrel
Gold: UP at $1,676.50 per ounce from $1,643.41 late on Friday
Euro/dollar: UP at $1.0852 from $1.0847
Pound/dollar: DOWN at $1.2924 from $1.2964
Euro/pound: UP at 83.95 pence from 83.67 pence
Dollar/yen: DOWN at 110.71 from 111.61