Asian markets slammed again as virus fears cause global turmoil

Monitoring Desk

HONG KONG: Asian markets were hammered yet again on Friday, tracking a collapse in New York and Europe as the coronavirus spread rapidly around the world with the WHO warning the deadly epidemic was now at a “decisive point”.

Equities from the United States to Asia are on course to record their worst week since the global financial crisis more than a decade ago as investors run to the hills on fears the virus will smash the global economy.

And while the panic has already caused a bloodbath on trading floors, there are warnings there could be worse to come.

The Dow suffered its worst points loss on record, shedding almost 1,200 points, while its 4.4 percent drop marked the worst performance in two years. The S&P 500 and Nasdaq also tanked more than four percent, with London, Frankfurt and Paris all posting losses of more than three percent.

The VIX “fear” index is now at its highest level since 2011 during the European debt crisis.

Donald Trump blamed the market plunge on the media coverage of the coronavirus and worries about Democrats winning the White House race.

The heavy selling came as authorities in California said they were monitoring some 8,400 people for COVID-19 after officials confirmed a woman had contracted it without travelling to any of the outbreak-hit regions.

“Even though the market is pricing in the fear of economic issues and disease hitting the US, we haven’t actually seen the emergence of clusters” in the US, Steve Englander, at Standard Chartered, told Bloomberg TV. “Once that happens we will see another sell-off.”

After Thursday’s battering, Asia picked up the baton. Tokyo tanked 3.5 percent, while Hong Kong, Singapore, Seoul, Wellington and Manila all lost more than two percent.

Shanghai was off 1.8 percent.

Decisive point

The virus has now killed 2,856 people and infected more than 83,000 worldwide, with an increasing number of new cases being reported each day.

Saudi Arabia banned pilgrims from visiting Islam’s holiest sites as the number of deaths jumped in neighbouring Iran, while Japan and Iraq ordered the closure of schools. And with other countries including South Korea and Italy becoming hotbeds of infection, there are growing fears of a pandemic.

Nigeria on Friday became the first sub-Saharan African nation to detect the virus in a patient.

“We’re at a decisive point,” WHO chief TedrosAdhanomGhebreyesus told a news conference in Geneva. “If you act aggressively now, you can contain this virus, you can prevent people getting sick, you can save lives.”

But the rate of increase in China continues to fall and there are signs the country is slowly creaking back to life with shops reopening, including Starbucks, which has resumed operations at all its outlets.

Still, Moody’s Analytics said the regional economy faced severe repercussions.

“The Asia-Pacific region’s exposure to the virus is significant,” it said in a commentary. “The most important channel of impact is via the close trading relationship with China.”

“China is the largest trading partner for most economies across the region, and with economic activity in China severely depleted by the virus, the repercussions will flow through to the rest of the region.

“There is no other country in Asia or globally that so many economies throughout the Asia-Pacific region are so heavily tied to.”

Crude prices were again hit, with both main contracts losing more than one percent, on expectations the crisis will put a massive dent in demand for the commodity, which was already under pressure owing to the struggling global economy.

Investors are keeping an eye on central banks, particularly the US Federal Reserve, hoping for monetary easing measures, while governments are also facing pressure to provide support.(AFP/APP)