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Coronavirus pandemic
BusinessMarkets

Stock index blood bath extends to Asia-Pacific as widening spread of coronavirus outbreak sets off worst market sell-offs since 2008

  • In the US, S&P 500 and Dow Jones Industrial Average fell into correction territory
  • Benchmark indexes fell in every stock market in the Asia-Pacific, from India to New Zealand, except for the KSE-100 in Karachi

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A trader works on the floor of the New York Stock Exchange shortly before the closing bell as the market takes a significant dip in New York on February 25, 2020. Photo: Reuters
Kathleen Magramo,Deb PriceandIris Ouyang
Asia-Pacific stock indexes tumbled , extending New York’s worst one-day market slump in two years across the region, as traders cleared their positions ahead of the weekend amid a deterioration in the spread of the coronavirus outside mainland China.

Equity indexes fell across every stock market in the Asia-Pacific region from India to New Zealand, except the KSE-100 on the Karachi bourse. Declines of more than 3 per cent, the usual measure of a major plunge, were recorded on nine out of 20 of the region’s stock exchanges.

“Enhanced coronavirus fears have battered global markets this week, especially in Asia,” said Adamas Asset Management’s managing director Brock Silvers. “Closer to the epicentre of the virus in China and Hong Kong, this has exacerbated the emotional trading pattern, as [market and macroeconomic] fundamentals are increasingly being obscured by transmission and mortality rates.”

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Dubbed “Black Friday” by the traders of China’s yuan-denominated A-shares, the region’s bloodbath began overnight with a 4.4 per cent plunge in the Dow Jones Industrial Average, the fourth time in Donald Trump’s presidency that the benchmark fell by more than 1,000 points after he failed to calm the financial markets. The broader S&P 500 index recorded a similar percentage drop, plummeting from its record high to correction territory in six days, according to data by Deutsche Bank Global Research.
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“Every tweet from Washington DC or unverified news from Seoul has the ability to whipsaw Hong Kong and China markets, and emotional responses often lead to over-reactions,” Silvers said.

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