Global markets plummet after having their worst day in two years

Global markets plummet after having their worst day in two yearsGlobal markets plummet after having their worst day in two years

Stock markets fell globally on Monday after coronavirus cases in Italy and South Korea surged, putting two more major economies at risk from a virus that has already wreaked havoc in China..

The Dow closed 1,032 points, or 3.6%, below its opening level, having experienced its worst day in two years since it fell more than 1,000 points below its opening twice in a week as inflation concerns then gripped Wall Street. February 5 and February 8, 2018, Dow percentage decline exceeded 4% on both days.

As the index is higher now, Monday’s percentage sell-off is not as dramatic as other drops in Dow history..

However, this was only the third time in history that the index closed more than 1000 points below its opening level. It is now in the red on an annualized basis and is at its lowest level since December 11.

S&The P 500 and Nasdaq Composite also crashed. S&P fell 3.4% and the Nasdaq fell 3.7%. VIX Market Volatility Rises More Than 46%.

The downturn in US exchanges on Monday follows sharp declines in markets in Asia and Europe as investors see risks to corporate profits and economic growth stemming from the spread of coronavirus.

South Korea’s Kospi Index closed almost 3.9% lower, its worst day since October 2018, after coronavirus cases in the country rose above 800. Italy’s main index fell 5.4% after infection cases there have exceeded 200 – including five deaths – and authorities began to close public buildings, schools and sporting events in parts of the country.

European bourses ended the day sharply in the red: Britain’s FTSE 100 closed down 3.3%. It was the worst day since January 2016.

Germany’s DAX lost 4%, French CAC 40 also fell almost 4%, the biggest drop since June 2016 for both indices.

In Asia, Hong Kong’s Hang Seng Index fell 1.8%, while China’s Shanghai Composite fell just 0.3%.

More companies are warning that the coronavirus will prevent them from meeting sales or profit targets in the first three months of the year. Lower demand for goods and services and plant closures in China are also expected to shock the global economy and negatively impact trade at a time when Japan and Germany are already on the brink of recession..

Stock market response to the outbreak has so far been rather muted, with US stocks making record highs. But the spike in coronavirus cases in Italy and South Korea, the world‘s eighth and twelfth largest economies, is raising fears of a pandemic and raising the stakes for businesses and investors..

World Health Organization prepares for potential pandemic, says WHO Executive Director Mike Ryan.

Oil prices also fell on fears that lower economic activity would affect energy demand. US futures were down 3.7% to $ 51.43 a barrel. Brent crude, the world’s oil benchmark, also fell 3.8% to $ 56.30 a barrel.

Investors, meanwhile, are investing in gold, pushing prices up nearly 1.7%, and in US Treasuries. The yield on 10-year government bonds fell to 1.37%. Prices and profitability move in opposite directions to each other.

In the foreign exchange market, the Japanese yen, another traditional safe haven, strengthened against the US dollar.

The number of coronavirus-related deaths has risen to over 2,620 worldwide, with more than 30 cases outside mainland China. There are at least 79,300 confirmed cases worldwide. Italian authorities have announced a large-scale closure in the north of the country in an attempt to contain the largest outbreak of the Wuhan virus in Europe. The number of confirmed cases in Italy rose from three on Friday morning to more than 150 on Sunday. Outbreak is largest outside Asia.