After two weeks of recording the necessary gains that followed massive financial incentives in the trillions of dollars, dealers returned to focus on the devastation that the epidemic inflicted on peoples and its long-term repercussions.
President Donald Trump’s medical team to fight Coved-19 has warned that the United States could record nearly a quarter of a million deaths. The president, in turn, warned of two “horrific” weeks ahead.
His real comments came at a time when several countries announced the extension of isolation measures that are tightening the screws on economies around the world.
The tension in the stock exchanges was exacerbated by a report that stated that China had not revealed the true outcome of the victims of the virus to it, while it started coming out of long isolation measures.
“The rising news about the virus in the past 24 to 48 hours is disappointing,” John Porter of the Mellon Investments Corporation told Bloomberg Television.
He added that “the global economy has reached a dead end. There is a lot of uncertainty and this is what contributes to market fluctuations and the downward path that we have seen in the past few days.”
Asian and European stock markets fell nearly 4 percent on Wednesday, as investors ignored data indicating that the loss in the number of public sector jobs last month was much lower than expected.
Attention is now focused on US jobless claims numbers expected from last week, which some estimates indicate will reach 6.5 million.
On Asian exchanges, Tokyo ended the morning session with a decrease of 0.8 percent, while the Hong Kong Stock Exchange fell 0.5 percent and Sydney by more than 2 percent. Shanghai fell 0.1 percent and Singapore 1 percent, while Manila and Wellington fell 2 percent.
But Seoul posted a 0.6 percent rise.
“With the sharp decline in the global economy, markets have returned to a risk-free mode … … as investors find it difficult to accommodate President Trump’s pessimistic forecasts that US deaths may continue until June,” said Stephen Ennis of Axecorp.
He added that investors are currently very tense.
On the other hand, crude oil recorded some increase, driven by the hope of an American intervention to end the price war between Saudi Arabia and Russia, which exacerbates the decline in demand caused by the emerging Corona virus.
On Friday, the President will meet energy sector officials to discuss the crisis threatening the sector at a time when prices have reached their lowest levels in nearly two decades.
The group, “Bank ANZ” said that prices are supported by reports that the US Department of Energy may lease local producers space to store reserves.
However, analysts say the gains may be limited given the implications of closing businesses, stopping flights and other social divergence measures aimed at curbing the virus outbreak.
In the morning trading session in Asia, the price of West Texas Intermediate crude increased by 3.25 percent, to reach $ 20.97 a barrel.
The price of Brent crude increased by 3.8 percent, to reach $ 25.68 a barrel.
And their prices had fallen to the lowest level on Monday, bringing West Texas to below $ 20 a barrel for a short period.