Global shares slide on fear virus’ spread may be unstoppable

TOKYO (AP) – Global shares fell yesterday on growing fears that a new virus’ spread may be unstoppable, hurting global growth considerably.

France’s CAC 40 lost 0.6 per cent to 5,644.47 in early trading, while Germany’s DAX fell one per cent to 12,661.83. Britain’s FTSE 100 lost 0.6 per cent to 6,976.95.

United States (US) shares appeared set to recoup recent losses with Dow futures up 0.3 per cent at 27,205. S&P 500 futures rose 0.5 per cent to 3,147.

Japan’s benchmark Nikkei 225 declined 0.8 per cent to finish at 22,426.19, while Australia’s S&P/ASX 200 dipped 2.3 per cent to 6,708.10.South Korea’s Kospi lost one per cent to 2,076.77. Hong Kong’s Hang Seng declined 0.8 per cent to 26,674.67. The Shanghai Composite fell 0.8 per cent to 2,987.93.

Shares fell in Taiwan and most of Southeast Asia but rose in Malaysia following recent losses due to political turmoil.

Currency traders at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

On Wall Street, the S&P 500 has lost 7.6 per cent in the last four days since hitting a record high last Wednesday. That’s the benchmark index’s worst such stretch since the end of 2018, resulting in USD2.14 trillion in losses, according to S&P Global. Tuesday also marked the first back-to-back three per cent losses for the index since the summer of 2015.

The latest wave of selling came as more companies, including United Airlines and Mastercard, warned the outbreak of a new coronavirus will hurt their finances, and more cases were reported in Europe and the Middle East, far from the epicentre in China. Meanwhile, US health officials called on Americans to be prepared for the disease to spread in the US, where there are currently just a few dozen cases.

The Dow Jones Industrial Average dropped 879 points, for a two-day loss of 1,911 points. Travel-related stocks took another drubbing, bringing the two-day loss for American Airlines to 16.9 per cent. The large publicly traded cruise operators have also suffered double-digit losses.

The worst-case scenario for investors — where the virus spreads around the world and cripples supply chains and the global economy — hasn’t changed in the last few weeks. But the probability of it happening has risen, said Chief Investment Strategist at BMO Wealth Management Yung-Yu Ma.

“It’s the combination of South Korea, Japan, Italy and even Iran” reporting virus cases, Ma said. “That really woke up the market.” The viral outbreak that originated in China has now infected more than 80,000 people globally, with more cases being reported in Europe and the Middle East.

The majority of cases and deaths remain centred in China, but the rapid spread to other parts of the world has spooked markets and raised fears that it will hurt the global economy.

South Korean virus cases jumped again yesterday and the US military confirmed its first case among soldiers based in the Asian country, with his case and many others connected to a southeastern city with an illness cluster.

South Korea’s Centers for Disease Control and Prevention said 134 of the 169 new cases were in Daegu, where the government has been mobilising public health tools to contain the spread of the outbreak.

The US military said the 23-year-old soldier was in self-quarantine at his off-base residence.