(Bloomberg) --
The sell-off sweeping global equities gathered pace on Thursday, with U.S. futures once again tumbling by the most allowed and a gauge of world stocks on course to enter a bear market. Treasuries and haven currencies rallied.
President Donald Trump’s remarks on the coronavirus were the catalyst for the latest leg down in risk assets. A combination of travel restrictions between the U.S. and Europe and underwhelming stimulus did little to reassure investors over American measures to handle the worsening outbreak.
On another bruising day across markets:
Futures for the S&P 500 once again hit their lower trading limit a day after the Dow Jones Industrial Average formally entered a bear market, ending the longest bull-run in history for American shares.The MSCI All-Country World Index extended losses to trade more than 20% below last month’s peak, putting it in bear market territory.The Stoxx Europe 600 tumbled about 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. India’s benchmark fell more than 8%.Treasury yields resumed their retreat, sliding by around 20 basis points to lead a rally in the safest government debt. Oil extended losses by more than 5%. Bitcoin slumped.
Trump unveiled steps including lending aid for small businesses and asked Congress to pass undefined payroll-tax relief, but his Oval Office address gave the market little confidence that the U.S. is tightening its grip on the virus or its economic impact. The World Health Organization earlier called the outbreak a pandemic and other countries, such as the U.K., have taken more extreme measures to try to blunt the threat to growth. The ECB is expected to announce its steps alongside a policy decision later on Thursday.
“Market moves suggest monetary stimulus has reached its limits,” said Lucas Bouwhuis, a portfolio manager at Achmea Investment. “Most of the stimulus needs to come from the fiscal side and we are just not seeing enough of that yet.”
Meanwhile, 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.
“The market will need much more to get its confidence back,” said Mohit Kumar, managing director at Jefferies International Ltd. “The economic slowdown is because consumers won’t spend as they don’t go out or travel -- you can’t make them spend by giving cheaper money. What you need is fiscal stimulus -- helping SMEs and helping banks.”
These are the main moves in markets:
Stocks
Futures on the S&P 500 Index declined 5.1% as of 8:22 a.m. New York time.The Stoxx Europe 600 Index fell 6.3%.The MSCI Asia Pacific Index dipped 4.4%.The MSCI Emerging Market Index dipped 4.6%.
Currencies
The Bloomberg Dollar Spot Index advanced 0.8%.The euro decreased 0.4% to $1.1225.The British pound sank 1% to $1.2691.The onshore yuan weakened 0.7% to 7.01 per dollar.The Japanese yen strengthened 0.7% to 103.79 per dollar.
Bonds
The yield on 10-year Treasuries sank 19 basis points to 0.68%.The yield on two-year Treasuries fell 13 basis points to 0.39%.Germany’s 10-year yield dipped three basis points to -0.77%.Britain’s 10-year yield declined five basis points to 0.245%.Japan’s 10-year yield climbed one basis point to -0.057%.
Commodities
West Texas Intermediate crude dipped 5.7% to $31.10 a barrel.Brent crude declined 5.9% to $33.69 a barrel.Gold weakened 1% to $1,619.29 an ounce.
--With assistance from Sophie Caronello, Min Jeong Lee and Adam Haigh.
To contact the reporters on this story: Sam Potter in London at spotter33@bloomberg.net;Anchalee Worrachate in London at aworrachate@bloomberg.net
To contact the editors responsible for this story: Sam Potter at spotter33@bloomberg.net, Yakob Peterseil
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https://finance.yahoo.com/news/asia-stocks-set-losses-dow-214907382.html
2020-03-12 12:25:00Z
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