Menu

Topics

Connect

Comments

Want to discuss? Please read our Commenting Policy first.

World shares extend losses as coronavirus continues to spread

WATCH: COVID-19 financial questions: stock market – Mar 25, 2020

World markets started the week with fresh losses as countries reported surging numbers of infections from the coronavirus that are forcing shutdowns of travel and business in many regions.

Story continues below advertisement

Shares fell in London, Paris and Tokyo but surged 7 per cent in Australia after the government promised more recession-fighting stimulus.

“We want to keep the engine of our economy running through this crisis,” Prime Minister Scott Morrison told reporters in Canberra. His unprecedented $130 billion package includes wage subsidies of up to $1,500 per two weeks to businesses to keep workers on the job.

U.S. futures yoyo’d throughout Asia’s day but turned lower. The future for the S&P 500 fell 0.6 per cent while that for the Dow industrials lost 0.8 per cent. Oil prices were lower.

Hopes that a $2 trillion U.S. relief bill would ease the economic havoc brought by the pandemic did little to alleviate the gloom prevailing in many markets.

On Monday, Germany’s DAX was flat at 9,634.00 while the CAC 40 in Paris lost 1.1 per cent to 4,304.63. Britain’s FTSE 100 declined 1.7 per cent to 5,415.26.

Story continues below advertisement

The pandemic relief bill approved by the Congress and signed Friday by President Donald Trump includes direct payments to households, aid to hard-hit industries like airlines and support for small businesses. Analysts expect markets to remain turbulent, however, until the outbreak begins to wane.

“Sentiment once again took a turn for the worse going into a week of reckoning by means of economic fundamentals,” Jingyi Pan of IG said in a commentary. “The rally seen for Wall Street last week may amount to little more but a relief rally with sentiment turning sour once again going into a fresh week.”

The push to deliver financial relief has gained urgency worldwide as the outbreak widens. The number of cases in the U.S. has now surpassed those in China and Italy, climbing to more than 142,000 known cases, according to Johns Hopkins University. The worldwide total has topped 723,000, and the death toll has topped 34,000, while nearly 152,000 have recovered.

Story continues below advertisement

On Monday, Tokyo’s Nikkei 225 lost 1.6 per cent to 19,084.97, while the Kospi in South Korea was flat at 1,717.12. The Shanghai Composite shed 0.9 per cent to 2,747.21, while the Hang Seng in Hong Kong slipped 1.3 per cent to 23,175.11.

Shares fell in Taiwan and Southeast Asia. India’s Sensex fell 4.2 per cent to 28,524.43.

Some investors have emerged to hunt for bargins as prices kept falling, said Francis Lun, CEO of Geo Securities in Hong Kong.

Story continues below advertisement

He views it as a bit too early.

“I think whatever rally you see, is really a false rally, it will be only a flash in the pan. It’s only temporary. Don’t go bottom fishing just yet because the worst is still to come,” Lun said.

READ MORE: Canada ‘very concerned’ with OPEC’s decisions amid coronavirus outbreak, Trudeau says

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.

The damage from the pandemic to corporate profits, the ultimate driver of stock prices, remains uncertain.

But energy companies are suffering as the price of oil sinks. U.S. benchmark crude dropped 5.4 per cent or $1.16 to $20.35 per barrel in electronic trading on the New York Mercantile Exchange. It slid 4.8 per cent to close at $21.51 a barrel on Friday. Goldman Sachs has forecast that it will fall well below $20 a barrel in the next two months because storage will be filled to the brim and wells will have to be shut in.

Story continues below advertisement

Brent crude, the international standard, gave up 6 per cent or $1.67 to $26.28 per barrel.

The yield on the 10-year Treasury slipped to 0.64 per cent from 0.68 per cent late Friday. Lower yields reflect dimmer expectations for economic growth and greater demand for low-risk assets.

In currency trading, the dollar was at 107.57 Japanese yen, down from 107.94 late Friday. The euro weakened to $1.1094 from $1.1142.

Advertisement
Advertisement

You are viewing an Accelerated Mobile Webpage.

View Original Article