Dow Jones index plunges, following Asia’s equity blood bath as US Fed makes second surprise rate cut to stave off recession

Dow Jones index plunged by more than 10 per cent, following a region-wide rout in Asia-Pacific stock markets on Monday, spooked by the US Fed’s second emergency rate cut in as many weeks

Hang Seng falls 4 per cent; has closed down six of last seven sessions

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Traders at the New York Stock Exchange (NYSE) on March 9, 2020. Photo: Xinhua

Published: 10:26am, 16 Mar 2020Updated: 11:58pm, 16 Mar 2020

The Dow Jones Industrial Average followed Asia-Pacific markets into a global rout on Monday as China’s dismal economic data added to rising concerns that the coronavirus pandemic is pushing the world to the cusp of a global recession, after the US Federal Reserve made its second emergency rate cut in two weeks.

The virus’ damage to China’s economy was underscored by data showing industrial production, retail sales and asset investment all declined in the January-to-February period far more than analysts expected. It was the first decline on record.

Worries were also escalating that the US, the world’s largest economy, could fall into a recession, as well as other parts of the world. The Dow Jones Industrial Average plunged by more than 10 per cent when trading began.

“The virus outbreak is still getting worse, and it’s difficult to predict the turning point of the stock markets,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.

Hong Kong’s Hang Seng Index closed down 4 per cent at 23,063.57. At one point, it traded below 23,000,at 22,842.25. It was its sixth close with losses out of the past seven sessions.

Mainland China’s Shanghai Composite Index fell 3.4 per cent in its biggest decline since February 28. (For in-depth coverage of Hong Kong and China markets, see the Stocks Blog.)