The European stock markets suffer badly from the outbreak of the corona virus in South Korea and Italy. All stock markets are recording heavy losses of around four percent. The AEX recorded a loss of 4.7 percent mid-afternoon. The Milan stock exchange loses almost 6 percent. They are the biggest losses in almost four years.
Wall Street also opened deep red. The Dow Jones and the Nasdaq technology fair are almost 3 percent lower.
The Amsterdam volatility meter VAEX and the American VIX, which show the nervousness of the trade and count as a kind of crisis meter, have risen like a rocket and are 30 to 40 percent higher. In a year, the trade has not been so bloody nervous.
Earlier, Asian stock markets closed at a loss, especially those in Hong Kong and South Korea. The South Korean Kospi index lost nearly four percent.
Oil prices are falling, gold prices are rising
Furthermore, concerns about the economy are depressing crude oil prices. Brent oil has become almost five percent cheaper and now costs $ 55 for a barrel. In times of tension and uncertainty, investors are looking for a safe place, for example gold and bonds. The gold price flies up and costs almost 1700 dollars for a troy ounce (31.1 grams), 10 percent more than for the corona crisis. Bond yields are falling in most countries, while Italy is rising.
The International Monetary Fund (IMF) regards the outbreak as an emergency situation and has reduced growth expectations for the world economy by 0.1 percent and that of China by 0.4 percent. The IMF says it has to deal with ‘more nasty scenarios’ if the spread becomes wider and lasts longer and grows into a pandemic.
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