Stock markets plunge on coronavirus fears
per cent.
BERLIN: European shares plunged on Monday due to coronavirus fears. The pan-European STOXX 600 fell 4.5 per cent to its lowest level since 2013.
Germany’s benchmark DAX was down 5.6 per cent in opening trades to 2016 levels, while bourses in France and Spain also receding after joining Italy in enforcing a national lockdown.
Paris was down 5.9 per cent, London fell 5.3 per cent, Milan lost 5.4 per cent and Spain retreated 4.8 per cent. Global markets also plunged as the sell-off continued. In China, which has largely contained the COVID-19 outbreak, the benchmark Shanghai Composite Index fell 3.4 per cent while the Shenzhen Composite Index fell 4.83 per cent.
Hong Kong’s Hang Seng Index was down 4.03 per cent by close.
Australia’s benchmark stock index fell 7 per cent in early trading, but recovered slightly. per cent,
Futures for US stocks all fell ahead of US exchanges opening.
Restrictions and countermeasures
per cent,
DW’s financial correspondent Chelsea Dulaney said investors “weren’t convinced” by measures introduced to help prop up the economy. Germany has introduced unlimited credit for businesses. Central banks have lowered rates.
The US Federal Reserve cut rates to nearly zero per cent while Japan’s central bank expanded its purchase of assets and announced interest-free loans to companies running short of cash.
“If you look at what’s happening with the markets, it’s really sentiment that is having an impact. This sentiment impact is because of two black swan events — the coronavirus and the fall in oil prices,” Medha Samant, Investment Director per cent at Fidelity Investment in Hong Kong, told DW. “Yes, central banks are providing some kind of cure to the markets, but it’s not really a cure.”
The People’s Bank of China said it would release 550 billion yuan (€70.3 billion, $78.5 billion) of liquidity into the market through lending requirement changes.
However, central banks are limited in how much they can do, due to already-low interest rates almost across the board.
For the first time in three decades industrial production in China contracted, falling 13.5% over January and February — a fall far further than expected. Retail also had its furthest fall in decades, with sales falling 20.5 per cent as compared to a 4 per cent predicted fall. Investors will closely watch a Group of Seven (G7) teleconference at 1400 GMT/UTC to discuss the health crisis.