Asian stock markets fell further Friday on spreading virus fears, deepening an global rout after Wall Street endured its biggest one-day drop in nine years.
Tokyo’s benchmark fell by an unusually wide margin of 3.4 per cent and Shanghai, Hong Kong and Seoul all dropped by more than 2 per cent. Oil prices slumped further on expectations industrial activity and demand might decline.
Investors who had been confident the disease that emerged in China was under control have been jolted by outbreaks in Italy, South Korea and Iran. They worry the virus is turning into a global threat that might derail trade and industry.
On Wall Street, the benchmark S&P 500 index is down 12 per cent from its all-time high a week ago.
A growing list of major companies are issuing profit warnings and say factory shutdowns in China are disrupting supply chains. They say travel bans and other anti-disease measures also are hurting Chinese consumer spending.
Virus fears “have become full-blown across the globe as cases outside China climb,” said Chang Wei Liang and Eugene Leow of DBS in a report.
Tokyo’s Nikkei 225 tumbled to 26,157.36 while the Shanghai Composite Exchange lost 2.9 per cent to 2,904.92. Hong Kong’s Hang Seng lost 2.3 per cent to 26,157.36.
The Kospi in Seoul fell 2.2 per cent to 2,007.89 and Sydney’s S&P-ASX 200 sank 2.3 per cent to 6,502.6. New Zealand and Southeast Asian markets also retreated.
On Thursday, the S&P 500 fell 4.4 per cent to 2,978.76.
The Dow Jones Industrial Average 1,190.95 points, its largest one-day point drop in history, bringing its loss for the week to 3,225.77 points, or 11.1 per cent. To put that in perspective, the Dow’s 508-point loss on Oct. 19, 1987, was equal to 22.6 per cent.
The U.S. losses extended a slide that has wiped out gains major indexes posted this year. Investors came into 2020 feeling confident the Federal Reserve would keep interest rates at low levels and the U.S.-China trade war posed less of a threat to company profits after the two sides reached a preliminary agreement in January.
U.S. bond prices soared as investors fled to safe investments. The yield on the benchmark 10-year Treasury note fell as low as 1.246 per cent, a record low, according to TradeWeb. When yields fall, it’s a sign that investors are feeling less confident about the strength of the economy.