After a decline by nearly 5% overnight, US stock index futures accelerated the losses on Thursday, with European markets have settled in the sea of red after a dip in Asia. Risk aversion has accelerated after the World Health Organization declared COVID-19 a pandemic. Earlier, the WHO officials maintained that the virus had pandemic potential, but stopped short of declaring it one.
As a result, Germany’s DAX got under the 10,000 level for the first time since 2016. Markets are also pressured by the reports that Trump announced a travel ban for 30 days from Europe. Meanwhile, Iran asked IMF for $5 billion to assist with coronavirus efforts. There are reports that the Japanese government likely to cut economic view this month due to virus impact. Ifo said more than half of German firms have been hit by fallout from the virus outbreak.
Amid these reports, stocks accelerated the decline across the globe despite China commerce ministry said that factory activity recovery is accelerating, and China NHC noted that the country has passed the peak of the coronavirus epidemic.
Elsewhere, the Eurozone industrial production rose by 2.3% on a monthly basis in January following December’s decline of 1.8%. The result came in better than the market expectation of +1.4%. the annual reading arrived at -1.9%, also better than expected. Despite the upbeat report, the common currency continued to decline against the dollar and registered nearly one-week lows around 1.1225 ahead of the ECB meeting. The European monetary authorities are expected to deliver stimulus measures to support the struggling economy amid the spreading coronavirus that hit Italy dramatically.
Meanwhile, bitcoin has accelerated the decline and plunged below the $7,600 support area. Now, the leafing cryptocurrency by market capitalization is threatening the $7,000 psychological level that may serve as a reversal point. Otherwise, the digital currency will see deeper losses with the initial target coming at $6,850, where early-2020 lows arrive.
