Following deep losses in Asia, European stocks opened sharply lower on Monday amid a steep fall on oil prices and the relentless spread of the coronavirus across the globe. Equities entered the bearish territory. The pan-European Stoxx 600 dropped over 6% to enter bear market territory while oil and gas stocks plunged 14% to lead losses in the global markets. Oil prices plunged more than 20% after OPEC failed to strike a deal with its allies regarding production cuts. As a result, Saudi Arabia slashed its prices, which fueled fears of a price war.
Also, coronavirus concerns continue to dominate market sentiment. According to the latest data from the World Health Organization, more than 109,000 people have now been infected by the virus and more than 3,700 have died globally. By the way, the number of confirmed cases in Germany jumped by more than 100 over the weekend while Italy remains the European country with the worst outbreak, with more than 7,000 cases. US stocks look set to open sharply lower as well, with futures on the Dow Jones industrial average plummeting more than 1,200 points.
Brent crude plunged aggressively after Russia rejected the OPEC’s recommended production cuts of 1.5 million barrels per day from April until the end of the year. Oil prices declined to the lows marginally above the $31 handle and then recovered to the $35 zone, staying at depresses levels after the disappointing OPEC meeting results. Despite the oversold conditions, the bearish risks persist in the market amid the rising fears of a price war in the market.
In currencies, EURUSD jumped to highs around 1.15 initially and remains elevated despite a partial correction from highs as the dollar has been under a heavy selling pressure along with stocks. Amid a massive risk aversion, USDJPY plunged to 101.50 and has regained the 102.00 figure since then. The technical picture in the pair has deteriorated further after the latest plunge, with the 103.00 figure stands as the immediate important resistance.
Meanwhile, bitcoin plunge immensely over the weekend and extended losses to the $7,600 on Monday, remaining under a heavy selling pressure along with stocks and oil. The immediate resistance now arrives at $8,000 and then at $8,400, where the 100-DMA lies.