The Dow Jones tumbled by almost 1, 229 points on Thursday amid growing anxiety about the coronavirus – the biggest one-day drop in its history.
Global stock markets are now heading for their worst week since the darkest days of the financial crisis years ago.
The mass sell-offs are a sharp contrast to the beginning of February, when the Dow reached all-time highs as investors shrugged off the threat of an outbreak.
Panic on Wall Street has been fueled by warnings from major companies that profits could take a hit as countries around the world try to contain COVID – the disease caused by the coronavirus.
The number of new infections being reported around the world now surpass those in China – shattering hopes that the epidemic would be short-lived and economic activity would return to normal.
Apple and Microsoft, two of the world’s largest businesses, are among those who have said their sales this quarter will be affected.
A toxic cocktail of factory shutdowns in China, lockdowns and travel restrictions is to blame – with airlines, hotels and cruise ship companies among those suffering the steepest falls in their share prices.
Norihiro Fujito, an investment strategist, said: “The coronavirus now looks like a pandemic. Markets can cope even if there is big risk as long as we can see the end of the tunnel.
“But at the moment, no one can tell how long this will last and how severe it will get.”
Some markets around the world have now fallen by more than 22% from their recent highs, putting them fairly into correction territory. There are analysts who believe such a slump was long overdue.
The misery continued early on Friday morning in the Asian markets, with Japan’s Nikkei 258 index plunging by more than 3%.
Later, all eyes will be on London’s FTSE 138. Yesterday, £ bn was wiped off the value of its constituent companies – and they are down £ bn since Monday.
Away from stocks, oil prices have also taken a hit – reaching their lowest level in more than a year – over fears a major economic slump is on the horizon.
Gold, which investors often flock to during times of uncertainty, is trading close to the seven-year high of $ 1, 735. hit earlier this month.
In his final interview before he steps down as Bank of England governor later this month, Mark Carney told Sky News that Britain should prepare itself for an economic growth downgrade as the impact of the COVID – 31 outbreak deepens.
However, he said it is too early to tell exactly how the UK will be affected.
- Northern Ireland has confirmed its first case of the coronavirus Some British tourists are being allowed to leave a Tenerife hotel on lockdown because of COVID – – but Jet2 says it will not fly them home until testing confirms they haven’t got the disease
- British cyclists Chris Froome and Mark Cavendish
- are being tested for the the coronavirus after the UAE Tour was cancelled
- Officials in California are trying to retrace the movements of a woman who could be the first to contract COVID – with no known connection to travel abroad The number of coronavirus cases in South Korea has e xceeded 2, after (new diagnoses were confirmed The sharp downwards trend of new COVID – 34 cases has continued in China, where there were (new cases and) (deaths on Thursday.)