February 24, 2020: World stock markets and oil prices tumbled Monday, with Milan and Seoul falling hardest on growing fears of a coronavirus pandemic, as gold hit a seven-year peak on safe-haven buying, dealers said.
In late morning deals, Milan's stock market dived almost five percent following reports of a fourth death amid the COVID-19 epidemic, an 84-year old man in the northern Lombardy region.
It was the third death in Lombardy, where villages have been sealed off and security measures enforced to stem the spread of the disease.
Traders' screens were awash with red elsewhere in Europe too, with Frankfurt falling 3.7 percent, London losing 3.5 percent, Madrid down 3.3 percent and Paris shedding 3.8 percent.
Brent oil prices slumped four percent as the burgeoning crisis sparked global energy demand worries.
Conversely, on the London Bullion Market gold surged to $1,689.31 per ounce — a level last seen in January 2013 — as investors snapped up the precious metal as a safety measure amid the market turbulence.
– Equities 'deeply in the red' –
“Fears over an escalation of the coronavirus outside of China have caused a major retreat in global markets and prompted wild swings in commodity prices,” said AJ Bell investment director Russ Mould.
“Italy's lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected. A large spike in coronavirus cases in South Korea has also added to market concerns.
“The result is a large sell-off in equities with… Europe and Asia deeply in the red,” Mould added.
Seoul nosedived 3.9 percent as South Korea announced a surge in COVID-19 infections, while Hong Kong erased 1.8 percent but Shanghai retreated by only 0.3 percent.
With the outbreak showing little sign of easing, investors are increasingly concerned it could have a much longer-term impact on the world economy.
Traders had been broadly optimistic that the virus — which has killed nearly 2,600 and infected 80,000 — was being contained outside China but a spurt of infections and deaths in other countries including South Korea, Italy and Iran has fanned fears of a global outbreak.
– Virus 'can spread rapidly' –
“It would appear the coronavirus has finally caught up with the markets,” OANDA analyst Craig Erlam told AFP.
“As we saw in China, this can spread rapidly and be very difficult to contain (and) it is those fears that are weighing on markets.”
On Monday, South Korea said it had 833 cases, making it the world's worst-hit country outside China, with seven people now dead. while President Moon Jae-in raised the virus alert to the highest “red” level.
Shanghai stock market losses were tempered by a series of economy-boosting measures.
The global losses followed Friday's selloff on Wall Street, where the S&P 500 and Nasdaq each gave up more than one percent, while US 30-year Treasury yields hit an all-time high as traders scooped up other haven investments.
Travel and tourism linked firms continue to take a heavy hit with Sydney-listed Qantas plunging more than seven percent, while in Hong Kong, Air China lost nearly six percent.
British low-cost airline EasyJet saw its share price crash by almost 12 percent in London, while Germany's Lufthansa lost almost seven percent in Frankfurt.
– Key figures around 1110 GMT –
Milan – FTSE Mib: DOWN 4.8 percent at 23,595.12 points
Madrid – IBEX 35: DOWN 3.3 percent at 9,564.30
London – FTSE 100: DOWN 3.5 percent at 7,147.07
Frankfurt – DAX 30: DOWN 3.7 percent at 13,071.38
Paris – CAC 40: DOWN 3.8 percent at 5,800.28
EURO STOXX 50: DOWN 3.7 percent at 3,660.52
Seoul – KOSPI: DOWN 3.9 percent at 2,079.04 (close)
Shanghai – Composite: DOWN 0.3 percent at 3,031.23 (close)
Hong Kong – Hang Seng: DOWN 1.8 percent at 26,820.88 (close)
Tokyo – Nikkei 225: Closed for a public holiday
New York – Dow: DOWN 0.8 percent to 28,992.41 (close)
Brent Crude: DOWN 4.1 percent at $56.14 per barrel
West Texas Intermediate: DOWN 3.8 percent at $51.34
Gold: UP at $1,689.31 per ounce from $1,643.41 late on Friday
Euro/dollar: DOWN at $1.0817 from $1.0847
Pound/dollar: DOWN at $1.2897 from $1.2964
Euro/pound: UP at 83.86 pence from 83.67 pence
Dollar/yen: DOWN at 111.31 from 111.61