A panic-like mood among investors caused the stock markets to collapse worldwide on Monday. Investors fled the stock market and fled to safe havens due to growing concerns about the corona virus and the additional risk of an oil price war.
The ATX in Vienna lost nine percent. The German share index DAX suffered the highest daily loss since September 11, 2001 with 7.94 percent. The New York Dow Jones plunged by 2,013.76 points or 7.79 percent to 23,851.02 points. This is the biggest minus in points in its history.
Trading suspended
The broader S&P 500 lost 7.60 percent. The technology-heavy Nasdaq 100 was down 6.83 percent. After panicky sales immediately after the start bell, the share trading was initially interrupted for 15 minutes. The price fluctuations were so great in the first minutes of trading that the exchange temporarily stopped trading. This enabled a rule to prevent the stock market crash from happening again on “Black Monday” in 1987.
There had also been sharp price losses in Asia before. In China, the Hang Seng index on the Hong Kong stock exchange reacted, falling 4.2 percent. The losses were somewhat lower in Shanghai and Shenzhen. South Korea’s finance minister Hong Nam Ki announces a temporary short sale restriction to stabilize financial markets.
In Tokyo, the Nikkei index fell 5.1 percent, the worst case since February 2018. In Australia, prices fell 7.3 percent, the deepest fall since October 2008 in the financial crisis. At the new start of trading, it also fell further by around 3.8 percent.
“Black Monday” on the stock exchanges
Fears of the economic consequences of the corona virus and the fall in the price of oil have sent stock markets around the world on a downward slide. The US exchanges started trading on Monday with huge losses.
–
The main reason for the price slide is the falling oil price. After the failure of the talks between OPEC and Russia over a common conveyor brake, Saudi Arabia has ramped up its production and declared a price war for Russia. The price of oil dropped 30 percent during the night to Monday – the largest drop since January 1991 at the beginning of the first Gulf War. At the start of the week, oil prices fell to their lowest level since early 2016. At its peak, the US oil price dropped to $ 27.34 and that of Brent oil to $ 31.02.
The corona virus also remained at the center of market activity. Experts had already presented initial estimates of its consequences for the global economy on Friday: In China, growth is expected to be cut in half in the current quarter.
Aid worth billions
The International Monetary Fund (IMF) meanwhile promised aid worth billions to affected countries. Up to $ 50 billion (€ 44 billion) would be available for poorer countries and emerging economies, IMF chief economist Gita Gopinath said on Monday. The money could flow through various credit lines, including short-term emergency financing. In any case, there has to be an internationally coordinated response to the global epidemic to help weaker countries.
The US Federal Reserve also expanded its aid measures. Barely a week after a rate cut, she increases her cash injection to the financial system. In Russia, the government and central bank reacted to the fall of the ruble and announced measures to support the local currency.
–
