Hong Kong: Equities and oil prices fell through the floor again after Donald Trump banned all travel from Europe to the US for a month to fight the coronavirus, ramping up fears the global economy will careen into recession.
As the disease showed no signs of abating, claiming more lives and infecting more people around the world, the US president said in a rare address to the nation that the ban would be in place for 30 days.
The news came after the World Health Organization officially labelled the outbreak a pandemic and hit out at ‘alarming levels of inaction’ for its spread.
Asian equity markets, already deep in the red in reaction to the WHO announcement, cratered after Trump’s address. Tokyo dropped more than five per cent, while Hong Kong finished the morning down 3.8 per cent and Sydney collapsed almost seven percent, with Bangkok around eight per cent down.
Seoul, Wellington, Mumbai and Taipei were off more than four per cent, with Singapore and Jakarta shedding more than three per cent. Shanghai eased 1.3 per cent.
The Japanese yen, a key haven in times of crisis and economic turmoil, jumped more than one per cent against the dollar.
‘Travel restrictions equal slower global economic activity, so if you need any more coaxing to sell… after a massively negative signal from trading in US markets it just fell in your lap,’ said AxiCorp’s Stephen Innes.
The losses followed another brutal session on Wall Street, with wave after wave of bad news, including Hilton withdrawing its earnings forecast and Boeing saying it would suspend most hiring and overtime pay.
The Dow fell into a bear market having lost more than 20 per cent since its recent high, and futures pointed on Thursday to another rout in New York and Europe.
The coronavirus outbreak has left virtually no sector untouched, though travel and tourism have been particularly hard-hit as countries institute travel bans and quarantine requirements, with Italy in a country-wide lockdown.