STOCKS HIT 20-WEEK LOWS
TURKEY stocks sank up to 10 percent as the conflict in Syria intensified, while fears of a looming pandemic and a likely global recession deepened a wider sell-off and sent emerging market (EM) stocks to 20-week lows.
Countries on three continents reported their first cases of the coronavirus on Friday, while the tally in mainland China alone was more than 78 800 with almost 2800 deaths.
The virus broke out late in December in China and with new infections reported around the world now surpassing those in China, any expectation that the epidemic would be over in a few months and economic activity would return to normal have been dashed.
The subsequent rout in markets pushed an index of world shares to its worst week since the financial crisis of 2008.
“The moves over the past week are giving a sense of a global recession,” said Morten Lund, a macroeconomic research analyst at Nordea Markets.
“There are only two things that can stop the sell-off – we get some official comments from several countries saying that they are starting to get things under control, or the central banks and the governments step in with stimulus to ease markets and restore credibility.”
MSCI’s index of EM shares slid 2.2 percent, with shares in mainland China, South Korea, India and Russia, all dropping more than 3 percent.
The broader index recorded its worst week in two years, down 7 percent, while on the month it is down 5 percent.
Turkey shares cut some early losses but still traded 5 perccent lower after an air strike by Syrian government forces in the Idlib region killed 33 Turkish soldiers, worsening the long existing conflict in Syria.
The country’s financial regulator banned short selling across all Turkish stocks for a day. The lira tumbled to a 17-month low of 6.2512 to the dollar, taking no relief from a weakness in the greenback.
President Tayyip Erdogan warned that Turkey would launch a full-scale offensive to repel Syrian forces unless they pulled back from Turkish observation posts, while the country’s communications director Fahrettin Altun called on Russia and Iran, who back Syrian President Bashar al-Assad, to stop the hostilities.
Russia’s rouble fell more than 1.5 percent against both the dollar and the euro.
Meanwhile, Nigeria currency slid past 400 naira to the dollar on the oneyear forward market after the country recorded it first case of coronavirus. I Reuters