Coronavirus: Wall Street crash drags Asian markets down
The spread of the epidemic in the United States generates panic. The change of course in the United States could have a knock on effect in losses. The ability to recover the global economy is overestimated. The fear of a new, big crisis like that of 2008.
Beijing (AsiaNews / Agencies) - New stock market crash in China and Asia after yesterday's collapse in New York and European listings. Wall Street lost 4%, the worst since 2011, triggering a series of sales in the rest of the world.
In the mid-afternoon, Shanghai and Shenzhen lost 3.70% and 4.93% respectively. The two markets burnt the gains made after the heavy fall of February 3, when they reopened from the Lunar New Year holidays and the blockade of activities decreed in China to contain the spread of Covid-19. Hong Kong, rather stable in the last few days, has dropped by 2.50% instead.
The Tokyo Nikkei fell 3% (the loss is 9% this week) and the Seoul Kospi by 3.30%. The Australian index closed with losses of 3.5%; the Indian one 2.5%.
According to analysts, fear and uncertainty for the future of the global economy dominate the exchanges, with the fear that the recovery forecasts for the second half of the year are too optimistic.
The growing spread of the virus outside of China, particularly in the United States, is creating a "panic effect" that also drags Asian stock markets down. The drop in cases and deaths in China is not enough to reassure investors, who are selling securities in exchange for safe haven assets like gold. The price of oil, which is based on future sales contracts, has dropped to $ 47 in the US market, a sign of growing concern about the state of the economy in the coming months.
The American stock market had remained stable so far, which had allowed the other lists to contain initial losses. The downward change of course in the United States is now in danger of causing further setbacks in other countries.
Many fear that the global economic and financial system will face a crisis of the same proportions as that of 2008, caused by the bursting of the speculative bubble in the United States. At the time, the affected countries adopted expansive policies to restart their respective economies, a recipe that they seem willing to propose again this time. The problem being that the world is already flooded with liquidity and the major economies already have very low interest rates (some, like Europe, are even negative).