London
Global stock markets tumbled on Friday as disruptions to business from the spreading coronavirus epidemic worsened, stoking fears of a prolonged economic slowdown.
European shares opened sharply lower, with travel stocks bearing the brunt. The pan-European Stoxx 600 index was down 2.4%. Germany’s DAX slid 2.4%, Britain’s FTSE 100 fell 1.8% and France’s CAC fell 2.4%. The MSCI All-Country World Index, which tracks shares across 47 countries, was down 0.72%.
After marking their worst weekly performance since the 2008 financial crisis, global stocks as measured by the index are up 1.7% this week, as sentiment recovered on the back of stimulus from policymakers to combat the economic fallout of the virus.
The US Federal Reserve made an emergency interest rate cut of 50 basis points earlier this week. The Bank of Canada and the Reserve Bank of Australia also cut rates, with investors expecting other major central banks to soon follow suit.
Officials and companies in Britain, France, Italy and the United States are struggling to deal with a steady rise in virus infections that have in some cases triggered corporate defaults, office evacuations and panic buying of daily necessities.
The outbreak spread across the US on Thursday, surfacing in at least four new states. “The interplay of virus containment fears and stimulus measures means that in the near term we expect market volatility to persist,” said UBS Global Wealth Management Chief Investment Officer Mark Haefele. Yields on US Treasuries fell to a record low and Treasury futures jumped as investors increased bets that the Fed will follow this week’s surprise rate cut with further easing. The yield on benchmark 10-year Treasury notes fell to a record low of 0.7650% on Friday.—Agencies
