Global Stocks Fall Sharply as Virus Fears Show No Signs of Easing
February 27 2020 - 4:28AM
Dow Jones News
By Chong Koh Ping and Caitlin Ostroff
Global stock markets dropped and U.S. government bonds rallied
as investors braced for greater economic fallout from the
international spread of the coronavirus.
European indexes dropped, with the Stoxx Europe 600 down 2.3%
and the German DAX falling 2.5%. In Asia, Japan's Nikkei 225 fell
2.1%, while Australia's S&P/ASX 200 lost 0.8% and Korea's Kospi
declined 1%.
Futures tied to the S&P 500 were down 1%, pointing to likely
declines when U.S. markets open later Thursday. The yield on the
10-year U.S. Treasury note, which registered a record closing low
of 1.310% on Wednesday, dropped further to 1.303%, according to
FactSet data. Yields move inversely to prices.
Thursday's declines in Europe and Asia follow a fifth
consecutive fall on Wall Street, with investors spooked by a
growing number of coronavirus cases outside China and fears that
the epidemic would dent corporate earnings and global growth.
More than 82,000 people have been infected and the death toll
stands at more than 2,800 globally, according to recent national
statistics from China, South Korea and elsewhere. On Wednesday,
American authorities said a patient in California might be the
first U.S. coronavirus case to be diagnosed without a clear
explanation for how the disease was transmitted.
"The global fear factor has become stronger due to the warnings
coming out from the U.S.," said Song Seng Wun of CIMB Private
Banking in Singapore. "And as recession risks grow, the markets
have become more jittery," he said.
Brent crude, the global oil benchmark, was down 1.3% at $52.15.
Gold rose 0.5% to $1,650 an ounce on Thursday.
In Chinese markets, Hong Kong's Hang Seng Index shed 0.6% while
the Shanghai Composite closed slightly up, adding 0.1%.
"There is a repricing of global and corporate growth
[expectations] after the outbreak of the coronavirus, and the
markets are down on the back of that," said Tham Mun Hon, head of
Greater China research at UOB Kay Hian in Hong Kong.
Although U.S. stocks had a strong start Wednesday, the Dow Jones
Industrial Average and S&P 500 both gave up gains to close
lower. That meant both benchmarks have now retreated for five
consecutive sessions as concerns have mounted over the economic
impact of the coronavirus.
In a survey of U.S. companies in China, nearly half of them said
they expect earnings to take a hit this year if business fails to
return to normal by the end of April.
Write to Chong Koh Ping at chong.kohping@wsj.com and Caitlin
Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
February 27, 2020 04:13 ET (09:13 GMT)
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