Covid-19 Fears Send Global Markets Into Tailspin

Global stocks are falling on renewed fears about the impact of the pandemic, along with sank on Wednesday as the coronavirus infects the global economic outlook, while oil prices slumped as OPEC-led output cuts were deemed insufficient to soak up a vast supply glut.

Sentiment turned sour on grim warnings over the economic impact of the pandemic, which was first reported in China and has so far killed more than 125,000 people and infected almost two million globally.

Investors also fretted over news that President Trump had frozen US funding for the World Health Organization over its handling of the crisis, particularly with regard to China.

Global stocks sank on Wednesday as the coronavirus infects the global economic outlook, while oil prices slumped as OPEC-led output cuts were deemed insufficient to soak up a vast supply glut.

Sentiment turned sour on grim warnings over the economic impact of the pandemic, which was first reported in China and has so far killed more than 125,000 people and infected almost two million globally.

Investors also fretted over news that President Trump had frozen US funding for the World Health Organization over its handling of the crisis, particularly with regard to China.

Top stock markets across Europe each shed around 3 percent, as collapsing oil prices sent the energy sector tumbling. The FTSE 100 in London closed down 3.3 percent, the DAX 30 in Frankfurt fell 3.9 percent and the CAC 40 in Paris closed down 3.8 percent. The Italian market lost almost five percent.

In New York, the Dow was down almost three percent in late morning trade, after more banks reported setting aside billions of dollars to cover a wave of expected sour loans, and after official data showing US retail sales tumbled 8.7 percent last month.

The International Monetary Fund forecast the global economy would shrink three percent this year and the US economy, the world's biggest, is set to contract by 5.9 percent, calling it the worst global downturn since the Great Depression of the 1930s.

"Yesterday's assessment by the IMF of the pandemic impact was an eye-watering assessment of the effect recent lockdowns are likely to have on global economic activity," said CMC Markets analyst Michael Hewson.

The benchmark West Texas Intermediate oil contract hit US$19.20 per barrel, the lowest level in 18 years. (AFP)