US stocks in the red as coronavirus fears continue
US stocks have fallen into the red as risk-off sentiment continues a day after equities plunged following a jump in the number of coronavirus cases outside China.
The S&P 500, which had opened higher along with other major US indices, was down 1.4 per cent two hours after the bell. The Nasdaq was 1.5 per cent lower and the Dow Jones had fallen 1.3 per cent.
European indices were even further in negative territory, with the FTSE 100 down two per cent, Germany’s Dax 1.7 per cent lower, and the French CAC 40 down 1.9 per cent.
The falls followed an equities bloodbath yesterday, which saw the FTSE suffer its worst day in almost five years and some parts of Wall Street give up all of their 2020 gains.
Investors were spooked by the rapid spread of coronavirus outside of China, where it originated and has killed more than 2,600 people.
Italy, South Korea and Iran are particularly hard-hit, raising concerns that the virus still has a long way to run and could take a heavy toll on the global economy.
The number of confirmed cases in Italy has now risen above 280, making it the worst-affected nation in Europe. The virus has claimed seven lives in the country.
Iran’s coronavirus death toll has risen to 16, the highest outside China. South Korea has suffered the most cases outside China, with 977 infections and 10 deaths.
“The morning bounce in European markets and US futures is a distant memory, as indices push to new lows thanks to the ongoing spread of the coronavirus,” said Chris Beauchamp, chief market analyst at online trading platform IG.
“The spread of the virus to Europe was always likely to be viewed as a much more worrying event than the broader outbreak in China, since the kind of draconian measures available to the Communist Party will be all but impossible to implement in the EU.”
The yield on the US 10-year Treasury bond – a traditional safe-haven asset during times of stress – fell five basis points (0.05 percentage points) to 1.323 per cent, close to record lows. Yields move inversely to price.