· Wall Street dives 4% as virus pandemic fears intensify
Wall Street’s three major indexes fell more than 4% on Wednesday, after President Donald Trump’s dire warning on the U.S. death toll from the coronavirus sent investors running from even the most defensive equities.
The Dow Jones Industrial Average .DJI fell 973.65 points, or 4.44%, to 20,943.51, the S&P 500 .SPX lost 114.09 points, or 4.41%, to 2,470.5 and the Nasdaq Composite .IXIC dropped 339.52 points, or 4.41%, to 7,360.58.
S&P 500 firms are expected to enter an earnings recession in 2020, falling 4.3% in the first quarter and 10.9% in the second, according to the latest estimates gathered by Refinitiv.
· European shares close 3% lower after US warns of soaring coronavirus death toll; banks fall 6%
European markets declined Wednesday as global market sentiment continued to take a pummeling amid the coronavirus outbreak.
The pan-European Stoxx 600 fell 3% by the close, with travel and leisure stocks leading losses on a 6.3% decline. Banks fell 5.8% after U.K. lenders announced they would scrap dividends in 2020 following pressure from the Bank of England.
· Australia stocks drop about 2% as second quarter continues its rocky start for Asia Pacific markets
Stocks in Asia Pacific traded lower on Thursday morning as markets globally continue their rocky start to the second quarter.
In Australia, the S&P/ASX 200 fell 1.98% in morning trade as almost all the sectors saw losses. The heavily-weighted financial subindex dropped about 4.9% as shares of the country’s major banks sold off.
Meanwhile, Japan’s Nikkei 225 dipped 0.47% while the Topix index shed 0.75%. South Korea’s Kospi edged lower.
Overall, the MSCI Asia ex-Japan index traded 0.5% lower.
Markets in India are closed on Thursday for a holiday.
Concerns over the economic impact of the global coronavirus pandemic, which has roiled markets in recent weeks, continue to weigh on investor sentiment. The rapid spread of the disease across the world has resulted in drastic measures by authorities such as widespread lockdowns that have left economies effectively frozen in many places globally.
· Analysts cut Asian firms' 2020 profit forecasts sharply on coronavirus worries
Analysts are cutting Asian companies’ 2020 earnings forecasts sharply on concerns that factory shutdowns and social distancing measures to combat the spread of coronavirus will hurt corporate profits badly this year.
Analysts have cut their profit estimates by 6.4% over the past month, Refinitiv data showed.
Last week, Goldman Sachs lowered its forecast for the region’s 2020 earnings per share (EPS) growth to -14% from +1%, bringing the aggregate cuts since the virus outbreak to 24 percentage points.
“We expect further substantial negative revisions. Among the larger markets, we lower our China 2020 earnings growth 6pp to -6%, Korea 42pp to -20%, Taiwan 32pp to -30% and India 12pp to -3%,” it said.
According to Refinitiv data, South Korea faced the biggest earnings downgrades in Asia, with an average cut of 24% in the past month.
South Korea’s exports dipped 0.2% year-on-year in March, data showed on Wednesday, as the coronavirus affected factory production and supply chains.
Indonesia, Thailand, and Australia also faced cuts of over 10% each over the past month.
Among industries, energy sector firms faced a 23% cut, the biggest to 2020 earnings as a result of a sharp decline in oil prices over the past month.
Reference: CNBC, Reuters
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