As fear towards a full-blown recession intensifies , the global stock market has tumbled hard on Monday. But, China’s stock market is faring relatively well, outperforming both U.S. and European markets.
The Dow Futures indicate that the Dow Jones Industrial Average (DJIA) is set to open with a 1,300-point drop . Based on Friday’s close at 25,864, the Dow Jones is anticipated to open with an immediate 5% plunge.
The FTSE MIB, the benchmark stock market index for Italy’s national stock exchange, plummeted by 9.5% on the day , marking a staggering 19% drop within merely 16 days.
European and U.S. markets saw a frantic sell-off of assets after extreme measures were taken by several countries to contain the coronavirus epidemic.
While the Italian stock market saw high levels of outflow from the stock market to bonds after the government’s decision to quarantine 16 million people , the U.S. stock market slipped due to concerns of non-action from the government.
The Centers for Disease Control and Prevention (CDC) said last week that it is vamping up testing capacity to evaluate as many individuals possible that are suspected to have coronavirus.
Reports indicated that CDC, with help from a private company, could test up to 1.5 million individuals by the end of this week.
Yet, concerns from scientists and virologists nationwide—like Yale professor Howard Forman dire warning on the potential scale of the coronavirus outbreak in the U.S.—have continued to invoke fear in the market.
China’s stock market closed the day with a 3% drop, outperforming the U.S., Italy, the U.K., Norway, Saudi Arabia, and many other countries.
The gradual recovery in the stock market of China has been attributed to a decline in the number of coronavirus cases as of recent.
Wuhan, the epicenter of the coronavirus epidemic, is preparing to close down temporary medical centers as more individuals get discharged.
After seeing the “2nd peak” of the coronavirus in late February, the overall rate of infection and expansion of the outbreak has been slowing down in China, leading to minor increase in stability across the society and economy.
The global stock market downtrend is showing no signs of slowing down.
Norway, Saudi Arabia, and South Africa saw their stock markets drop by 12%, 9%, and 6% on the day, as the probability of a worldwide recession rises.
According to FT’s Jim Pickard, the FTSE 100—a share index of the top 100 companies on the London Stock Exchange—had its biggest single-day plunge in recent years, a fall even larger than 9/11.