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World stocks sink on coronavirus shock, oil price crash

European shares slumped across the board this morning as a lockdown in northern Italy due to the coronavirus outbreak and a 30% plunge in oil prices amplified fears of a global recession. 

London’s commodity-heavy FTSE 100 was down 8.6%,with shares of oil majors BP and Royal Dutch Shell down more than 20%. 

The top decliner in London was Tullow Oil, with an eye-popping 57% drop.

Shares in Frankfurt also plunged over 8%, while the Paris CAC was down 7%. The Dublin market also sank by over 6%.

Europe’s oil & gas index tumbled 7.3%, with crude prices in a free fall after Saudi Arabia started a price war by slashing its official selling price and setting plans for a dramatic increase in crude production next month.

Italy became the frontline of the crisis in Europe after the government ordered a virtual lockdown across much of its wealthy north, including the financial capital Milan, in a drastic new attempt to try to contain the outbreak.

Global share markets plunged this morning as panicked investors fled to the safety of bonds and the yen to hedge the economic trauma of the coronavirus.

Oil plunged more than 30% after Saudi Arabia opened the taps in a price war with Russia. 

Saudi Arabia had stunned markets with plans to raise its production significantly after the collapse of OPEC’s supply cut agreement with Russia, a grab for market share reminiscent of a drive in 2014 that sent prices down by about two thirds.

The shock in oil was seismic as Brent crude futures slid $12 to $33.20 a barrel in chaotic trade, while US crude shed $11.80 to $29.48.

In Asia, stocks tumbled, the safe-haven yen surged and emerging market currencies with exposure to oil tumbled in volatile trade. 

Japan’s Nikkei index dropped 4.5% and Australia’s commodity-heavy market closed down 7.3%, its biggest daily fall since the 2008 global financial crisis. Shares in Hong Kong were down 4.4%.

The number of people infected with the coronavirus topped 107,000 across the world as the outbreak reached more countries and caused more economic carnage.

Not helping the mood was news North Korea had fired three projectiles off its eastern coast today.

Urgent action was clearly needed with data suggesting the global economy toppled into recession this quarter. 

Figures out from China over the weekend showed exports fell 17.2% in January-February, from a year earlier. 

Analysts at Bank of America Global Research estimated the latest sell-off had seen $9 trillion in global equity value vaporised in nine days.

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