Despite the announcements of the great powers of aid plans to curb the consequences of the coronavirus, the bags fell again this Wednesday in Europe, the United States and Asia.
The bag of NY, on a roller coaster for weeks, It was back down in the opening despite announcements of multimillion-dollar packages to help the US economy deal with the coronavirus: the Dow Jones was down 6.07% and Nasdaq was 5.55%.
In Europe, the main indexes lost the gains of the eve. At 13:30 GMT, Milan yielded 2.5% and Madrid, 3.25%, while Paris fell 5.1%; London 4.4% and Frankfurt 4.8%.
In addition, the 5.8% drop of the index Euro Stoxx 50, which brings together the most capitalized companies in the euro zone.
The collapse of some stocks reflects the discomfort of the industry, starting with the Aeronautic sector (Airbus lost 14% in Paris) and the sector of the car, forced to close its factories.
In Frankfurt BMW lost more than 8% and Daimler more than 6%.
Unlike some biotech companies working on a vaccine against the new coronavirus were shot in the bag, like the German BioNtech, which is listed on the Nasdaq Index.
Investors also sell European debt despite the fact that the European Central Bank (ECB) has said today that it is willing to take appropriate measures to provide liquidity to the system.
So, ten-year german debt, a benchmark fixed income asset in Europe and worldwide,increased his interest by 13 hundredths, although it was still at negative levels, at -0.31% (last week it reached the record low of -0.86%).
The price of the euro fell slightly compared to the previous day and stood at $ 1,097.
Oil continues to fall
The growing concern about the impact that COVID-19 will have on oil demand continued this Wednesday. pushing down the price of a barrel of oil.
The WTI barrel of oil suffered a historical drop of 12%, to $ 23.60, its lowest price since 2002.
For its part, the North Sea barrel of Brent fell to $ 26.65, a record low since 2003. The cost of European benchmark oil was thus down 5.6% compared to Tuesday’s close.
Crude has plummeted near the 17-year lows in recent days, with travel restrictions and other measures aimed at fighting the virus that affects demand, and the main producers in Saudi Arabia and Russia locked in a price war.
Asian stocks fell on Wednesday despite initial rises spurred by announced measures, including a trillion dollar plan in the United States.
The Tokyo Stock Exchange fell 1.68%, its worst close since November 2016, after a hopeful session due to expectations about the economic stimulus measures. The mining sector led the losses, followed by real estate and port storage and transportation.
On the flip side of the coin, the conglomerate Fujifilm starred in the Nikkei’s biggest climb, 15.42%, after a Chinese government study pointed out that Her experimental flu medication Avigan is working to treat patients with the new coronavirus in clinical trials.
Hong Kong lost 4.08%, While Shanghai closed with a loss of 1.83%.
Stock markets continue to fall despite economic support plans
For their part, US forward contracts foreshadowed a further fall in Wall Street.
In recent days, markets have been very volatile, a sign of uncertainty.
“The sea is rough, it is normal that we are aimless”, points to AFP Thierry Leclercq, stock manager at Mandarine Gestion.
A large number of central banks lowered their interest rates and large economies announced budget aid. But experts doubt the effectiveness of these measures as long as the virus remains active.
The United States is preparing a nearly trillion-dollar support plan, according to the American media.
For its part The US Federal Reserve also created a mechanism to allow households and businesses easier access to credit.
The European Central Bank announced for its part 100 billion euros of liquidity for banks. Aid that joins the tens of billions announced by several European countries, now the epicenter of the epidemic.
“For the moment, governments are adding new decisions to others that they have not yet made, central banks seem locked in their autonomy and international cooperation is nothing.” indicates an LBPAM note.
For IG France’s Vincent Boy, “all the liquidity in the world is useless if the activity cannot be resumed as soon as possible ”.
The European Union made the exceptional decision, for the first time in its history, to close its borders, until April 17. The President of the European Commission acknowledged that policy makers had initially “underestimated” the danger of the epidemic.
Like Italy, Spain and France, Belgium began its general confinement on Wednesday.
Market players now expect the United States to take similar steps, which would have a huge impact on the economy.
“The question is not to know if there will be a coronavirus-induced recession, but to what extent it will be severe.” says Ipek Ozkardeskaya, an analyst at Swissquote Bank.
“It is not clear that drastic measures will help economic statistics if US activity were to stop as is the case in Europe,” points out an expert.
It has been three weeks since the capital markets experienced great instability.
So market regulators took action. Italy decided to ban short sales for three months and Spain, France and Belgium for one month.