• February 26, 2020
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Global financial markets plunge amid coronavirus fears

The spread of COVID-19 has planted doubts amongst investors resulting in global financial markets taking a dive.

Rising sentiment of a possible slowdown on global growth has led to a mass sell-off of risky assets, causing huge losses on the US market. S&P 500 reported that about 6.3% or $1.737 trillion has been wiped out after a two-day market sell-off. Approximately $927 billion was lost on Monday, 24 February, followed by another $810 billion loss the next day. The Dow has also reported shedding 900 points or about 3%, while NASDAQ reported a 2.8% plunge.

In the UK, the FTSE 100 took a 2% dive to a 12-month low. Meanwhile, Japan’s Nikkei 225 fell by approximately 3.3%.

Airlines, travel companies, and hotels were amongst the worst hit as ports in and out of China have been tightened. Similarly, companies whose supply chains were derailed due to factory shutdowns in China were affected as well. Oil prices have also dropped because of the spread of the coronavirus. 

Analysts say, however, that the market is unlikely to suffer lasting consequences as things will pick-up again when the outbreak ends.

"Those who expect the virus to kick off a global recession might be disappointed, as the impact is likely to be temporary. Central banks around the globe are ready to inject liquidity and cut down interest rates to cushion the headwind", said CMC Markets analyst Margaret Yang.