Asian stocks plummeted down on Wednesday due to the major sell-off on Wall Street. European stocks have also lowered. However, U.S. equity futures and Treasuries steadied. U.S. President Donald Trump wrote on Twitter that the Stock Market was starting to look very good to him on late Monday. But not all share the sentiment.
Democratic presidential candidate Elizabeth Warren stated that stocks’ recent downfall is just the “tip of the iceberg” of a growing threat to the economy from the coronavirus.
The traders are watching closely for any signs of policy accommodation while the global economy is trying to deal with the damage caused by the virus. Federal Reserve Vice Chairman Richard Clarida declared that the U.S. central bankers are closely monitoring the outbreaks. But it’s still too early to say whether it will result in a material change to the outlook.
So far, traders hope that the markets will rebound soon. However, a Sydney-based strategist at Saxo Capital Markets, Eleanor Creagh, said that the ultimate impact remains entirely unknown at this stage.
Which Stocks Suffered the Most?
South Korean and Australian stocks collapsed. The won dropped down to its lowest point since 2015. Kospi index slid by 1.3%. Australia’s S&P/ASX 200 Index also declined by 2.3% while Euro Stoxx 50 futures plummeted down by 0.8%.
Meanwhile, Japan’s Topix index decreased by 0.8%, after dropping by 1.9% earlier in the day. Hong Kong’s Hang Seng also lost 0.9%, and the Shanghai Composite fell by 0.8%.
The S&P 500 Index has also fallen by 3%, experiencing its worst two-day slide since 2015. However, the stock added 0.2% in early trading this morning.
Coronavirus cases surpassed 1,000 in South Korea, and American health officials warned on Tuesday that they expect the epidemic to spread in the U.S. This news caused the sell-off in the market.
The bonds suffered along with the stocks. The yield on 10-year Treasuries fell one basis point to 1.34%, and Australia’s 10-year yield fell one basis point at 0.92%.
