World stock rout extends as fear grips markets
Fear over the economic fallout from the spreading coronavirus tightened its grip on global markets, sending US equities to a seventh straight loss and sparking demand for safe assets from Treasuries to the yen.
The S&P 500 plunged more than 3 per cent on Friday and is now down over 15 per cent from its record. The index is mired in its longest slump in over three years and careening toward its worst week since the financial crisis. The Dow Jones Industrial Average has shed more than 4,000 points this week. Treasury yields sank to all-time lows, with the two-year tumbling through 1 per cent and 30year rates under 1.7 per cent. Crude slid toward
Pune, Feb. 28: Auto stocks plunged on Friday over fears of supply chain disruptions. The BSE auto index dropped
3.78 per cent with Tata Motors plunging 11.03 per cent. Ashok Leyland fell
8.15 per cent and M&M
7.50 per cent. According to the Association of Indian Forging Industry
$44 a barrel, while gold lost 2 per cent. European shares headed for August lows and Asian equities fell more than 2.5 per cent.
The sell-off picked up steam after a White House official suggested the virus could force some schools to close and more companies warned that disruptions could upend sales and profit forecasts. (AIFI), China is a leading supplier of auto components to India and any supply disruptions from there would hurt automobile production here. It said vehicle-makers have reduced their production plan for February and March due to non-receipt of components.
Germany quarantined about 1,000 people and Switzerland banned large events, leading to the Geneva car show being cancelled. Iran and South Korea revealed more infections while the first cases appeared in Mexico and Nigeria, Africa’s most populous country.
That’s all put shares worldwide on course for
Mumbai, Feb 28: Shares of airline companies plunged up to 10 per cent on Friday. Shares of Interglobe Aviation plunged 9.99 per cent to Rs 1,229.75 on the BSE. Spicejet cracked 6.06 per cent to a low of Rs 82.10. Defunct airline Jet Airways hit its lower price band losing 4.84 per cent at Rs 24.55. the worst week since the
2008 crisis, down around
10 per cent. With the likes of Citigroup Inc saying they want to see markets “closer to panic” before going all-in on global equities, the dip buyers who have helped make this bull market the longest on record are nowhere to be seen.
“Investors are selling stocks first and asking questions later,” Keith Lerner, SunTrust’s chief market strategist, wrote in a note:
“We are seeing signs of pure liquidation. ‘Get me out at any cost’ seems to be the prevailing mood. There is little doubt the coronavirus will continue to weigh on the global economy, and the US will not be immune. There is much we do not know. However, it is also premature to suggest the base case for the US economy is recession.”
Downgrades to the global outlook keep rolling in and money markets now see three Federal Reserve interest-rate cuts this year. Bank of America predicted that the global economy will see its weakest year since the financial crisis as the virus damages demand in China and beyond.