Global stocks and oil plunge
Global stocks plunged into a bear market and oil slumped on Thursday after U.S. President Donald Trump banned travel from Europe to stem the coronavirus, threatening more disruption to the world economy.
With the pandemic wreaking havoc on the daily life of millions, investors were also disappointed by the lack of broad measures in Trump’s plan to fight the pathogen, prompting traders to bet on further aggressive easing by the Federal Reserve.
European shares plummeted to their lowest in almost four years, with the benchmark STOXX 600 index falling 4.9% in early deals. Travel and leisure stocks shed 8.6%, hitting their lowest in more than 6 years.
The falls pushed the MSCI AllCountry World Index, which tracks stocks across 49 countries, into bear market territory, down 20% from its 52-week peak. The index was down nearly 2% on the day. Investors also rushed to safehaven assets from bonds to gold to the yen and the Swiss franc.
U.S. S&P 500 futures ESc1 plummeted as much as 4.9% in Asia and last traded down 4.07 , a day after the S&P 500 .SPX lost 4.89%, leaving the index on the brink of entering bear market territory, defined as a 20% fall from a recent top. Those fears left a trail of red across many markets.
Japan’s Nikkei crumbled 4.4% to a trough last seen almost three years ago while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 4.7%. Australian shares plunged 7.4% to the lowest level in more than three years while Seoul’s Kospi .KS11 fell 4.8% to 4-1/2-year lows with massive selling prompting a brief trade halt.
Trump announced on Wednesday the United States will suspend all travel from Europe, except from Britain, to the United States for 30 days starting on Friday. However, Trump said trade will not be affected by the restrictions. He also announced some other steps, including instructing the Treasury Department to defer tax payments for entities hit by the virus.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.