Global Stocks Head for Bear Market as Rout Deepens: Markets Wrap - Yahoo Finance

Global Stocks Head for Bear Market as Rout Deepens: Markets Wrap

(Bloomberg) --

The sell-off sweeping global equities gathered pace on Thursday, putting a gauge of world stocks on course for a bear market as European shares plunged, U.S. futures pointed to more heavy losses on Wall Street and Asian benchmarks tumbled. Treasuries and haven currencies rallied.

President Donald Trump’s remarks on the coronavirus appeared to be the catalyst for the latest leg down in risk assets; a combination of travel restrictions between the U.S. and Europe and underwhelming stimulus measures did little to reassure investors.

On a bruising day across markets:

The MSCI All-Country World Index extended losses to trade more than 20% below last month’s peak, putting it in bear market territory.U.S. equity futures once again plunged toward their trading limits a day after the Dow Jones Industrial Average formally entered a bear market.The Stoxx Europe 600 tumbled more than 6%, with most industry sectors down 5% or more and trading volumes more than double the 100-day average. The cost of insuring debt issued by Europe’s investment grade companies surged to the highest since 2016.Japanese stocks closed more than 4% lower even after another liquidity pledge from the country’s central bank. Australian shares were among the worst performing worldwide, sinking deeper into a bear market despite a stimulus plan there.Treasury yields resumed their retreat and oil extended losses.

Trump unveiled steps including lending aid for small businesses and asked Congress to pass undefined payroll-tax relief, but his Oval Office address appeared to give little confidence to the market that the U.S. is tightening its grip on the deadly virus. The World Health Organization earlier called the outbreak a pandemic and the Dow Jones Industrial Average tipped into a bear market, ending the longest bull-run in history for U.S. shares.

“Recession risk is rising and we are nowhere near pricing that in,” said Sue Trinh, global macro strategist at Manulife Investment Management in Hong Kong. “All the ‘solutions’ we are seeing from the powers that be are reminiscent of the great financial crisis,” but what’s more important is resources for the virus fight, she said.

Signs that companies in the hardest-hit industries were drawing down credit lines to battle the effects of the virus on their businesses added to anxiety.

These are the main moves across markets:

Stocks

Futures on the S&P 500 Index declined 5% as of 9:25 a.m. London time.The Stoxx Europe 600 Index fell 6.1%.The MSCI Asia Pacific Index decreased 4.2%.The MSCI Emerging Market Index dipped 4.4%.

Currencies

The Bloomberg Dollar Spot Index gained 0.4%.The euro decreased 0.1% to $1.1257.The British pound dipped 0.4% to $1.2771.The onshore yuan weakened 0.5% to 6.996 per dollar.The Japanese yen strengthened 0.8% to 103.75 per dollar.

Bonds

The yield on 10-year Treasuries fell 15 basis points to 0.72%.The yield on two-year Treasuries fell 14 basis points to 0.38%.Germany’s 10-year yield dipped four basis points to -0.79%.Britain’s 10-year yield declined seven basis points to 0.227%.Japan’s 10-year yield climbed one basis point to -0.057%.

Commodities

West Texas Intermediate crude dipped 4.8% to $31.39 a barrel.Brent crude declined 5% to $34 a barrel.Gold strengthened 0.4% to $1,641.44 an ounce.

--With assistance from Sophie Caronello, Min Jeong Lee and Adam Haigh.

To contact the reporter on this story: Sam Potter in London at spotter33@bloomberg.net

To contact the editors responsible for this story: Sam Potter at spotter33@bloomberg.net, Yakob Peterseil

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2020-03-12 09:26:00Z
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