Global markets sink as pandemic deaths soar

European equities tanked four percent at the open before trimming some losses — but still remained deep in the red in late morning deals and following heavy losses across Asia.

The dollar scaled to a three-year pinnacle against the euro as investors shunning risky equities flocked to the haven greenback.

On oil markets, Brent North Sea crude sank 4.6 percent and West Texas Intermediate was down 0.8 percent.

Oil has plunged in recent weeks to multi-year lows, mainly on slumping demand caused by the virus — but also because of a price war between top producers Saudi Arabia and Russia.

– ‘Mammoth recession’ –

“Markets are again showing stress on fears that the economic damage will be worse than anticipated and that the response by governments and central banks will not be enough to prevent a mammoth recession,” said analyst Neil Wilson at trading site Markets.com.

“James Bullard, President of the St Louis Fed, said US unemployment could reach 30 percent in the second quarter due to coronavirus shutdowns, while he warned GDP could decline by 50 percent. This would be an unprecedented event.”

The global death toll from the virus has surged past 14,400, with nearly a billion people confined and non-essential businesses shut in dozens of countries and growing fears about a recession.

“A leap in the global death toll led by Italy from the coronavirus coupled with a failed stimulus vote in the United States saw markets rocked at the start of the week,” said London Capital Group analyst Jasper Lawler.

The European single currency meanwhile sank to $1.0636, a level last seen in April 2017.

“In times like these cash is king and the dollar is king of cash,” added Lawler.

In the Asia-Pacific region, Wellington stocks nosedived 7.6 percent as New Zealand announced a four-week lockdown to stop the spread of the coronavirus.

Hong Kong ended the day down 4.9 percent, Sydney dropped 5.6 percent and Shanghai shed 3.1 percent…….read more

Source: AFP