Financial markets around the world took another hammering on Monday as a rising tide of national coronavirus lockdowns threatened to overwhelm policymakers' frantic efforts to cushion what is likely to be a deep global recession.
US futures slipped more than 3 percent on Monday and share benchmarks in many Asian markets logged sharp losses as still more governments tightened restrictions to fight the coronavirus pandemic.
India's Sensex plummeted 12.1 percent after a sharp drop on the open triggered a circuit breaker halt to trading. Singapore's benchmark plunged 7.7 percent after the city announced a sharp increase in confirmed infections and its first two deaths.
Seven percent fell in Bangkok shares
Besides the fall in shares, Japan's Nikkei 225 index held steady, gaining 1.9 percent by mid-Monday. Investors appeared to be encouraged by the likelihood the International Olympic Committee might postpone, rather than scrap, the Tokyo Games.
Japan’s Prime Minister Shinzo Abe acknowledged that a postponement could be unavoidable as Canada and Australia added to the immense pressure that has been mounting on organizers by saying they wouldn't send athletes to Tokyo unless the Olympics are postponed for a year.
In the US, top-level negotiations between Congress and the White House continued after the Senate voted against advancing a nearly $2 trillion economic rescue package. Another vote was expected on Monday.
The Democrats said the bill was tilted too much toward aiding corporations and would not do enough to help individuals and healthcare providers weather the crisis brought on by the pandemic.
By 0100 GMT, the S&P 500 futures contract was down 3.5 percent at 2,209.60. The future for the Dow dropped 3.6% percent to 18,356.00.
Markets reopened to an altered business landscape as lockdowns and closures intended to halt the spread of the new coronavirus expanded over the weekend to include many cities around the world and the number of people infected surged past 336,000.
“Risk aversion appears here to stay as investors become more fearful that this could be the worst global recession during peacetime,” Edward Moya of Oanda said in a commentary.
“Every passing day it seems lockdown efforts are intensified globally thus it seems financial markets will remain nervous until we see the infection rate improve in both the U.S. and Europe," Moya said.
Sydney's S&P/ASX 200 fell 5.6 percent to 4,546.00 after plunging more than 8 percent sharply just after the open.
Australia announced a 66.4 billion Australian dollar ($38.5 billion) stimulus package on Sunday. That's in addition to an earlier mandated $10 billion package and another stimulus from the central bank.
South Korea's Kospi lost 5.3 percent to 1,482.46. Hong Kong's Hang Seng index shed 4.6 percent, to 21,756.57, while the Shanghai Composite index slipped 3.1 percent to 2,660.17. The Nikkei was at 16,887.78.
Wall Street stocks
Stocks fell sharply on Wall Street and the price of oil sank again Friday as New York became the latest state to decide that nearly all workers should stay home to limit the spread of the coronavirus. California and several other states in the US and a growing number of countries have also imposed limits on business activity.
The S&P 500 lost 4.3 percent to 2,304.92 on Friday while the Dow skidded 4.6 percent to 19,173.98. The Nasdaq composite index lost 3.8 percent to 6,879.52.
This week will bring fresh data that are likely to underscore the damage to Asian economies from the outbreak of the virus that originated in China.
A sharp surge in cases and in deaths across the region, especially in Southeast Asia, has also raised the level of alarm.
Shutdowns mean less demand for oil. US crude has dropped about 21 percent, dipping below $20 a barrel last week for the first time since February 2002. However, on Monday benchmark crude was up 22 cents at $22.85 per barrel in electronic trading on the New York Mercantile Exchange.
Brent crude, the international standard, dropped 72 cents to $26.26 per barrel.
Sweeping shutdowns in many countries and resulting layoffs raise the spectre of a global recession.
Ultimately, investors say they need to see the number of new infections stop accelerating for the market to end its prolonged, bouncing tumble to lows not seen for over a decade.
The S&P 500, the benchmark for many index funds held in retirement accounts and the measure preferred by professional investors, is down 31.1 percent since reaching a record high a month ago. Last week marked its biggest weekly loss since October 2008 during the global financial crisis.
Investors have continued to seek safety in US government bonds, driving their yields broadly lower. The 10-year Treasury yield, which influences interest rates on mortgages and other consumer loans, slid to 0.81 percent early Monday from 0.94 percent late Friday.
At nearly $2 trillion, the US rescue package is the biggest effort yet to aid households and shore up the U.S. economy, the world's biggest.
But markets have continued to fall as scores of other governments and many central banks have acted as they try to stave off or at least alleviate the impact of a recession.
As investors scramble for cash, demand for the US dollar has been soaring. The dollar was at 110.18 Japanese yen on Monday, down from 110.83 yen late Friday.
The euro rose to $1.0742 from $1.0697.
European stocks slump
Stocks dived 4.5 percent as they reopened and commodity markets also saw more heavy selling as the global death toll from the virus passed 14,000.
Investors tried to take cover in ultra-safe government bonds and in the Japanese yen in currency markets but with so much uncertainty about when any semblance of normality might return there were few places to really hide.
Asia shares sink on recession fears
In Asian trade, MSCI's broadest index of Asia-Pacific shares outside Japan lost 5.4 percent, with New Zealand's market shedding a record 10 percent at one point as the government closed all non-essential businesses.
Shanghai blue chips dropped 3.3 percent, though Japan's Nikkei rose 2.0 percent aided by expectations of more aggressive asset buying by the Bank of Japan. In Australia, the S&P/ASX200 dropped 5.62 percent to take the index to a seven-year low.
London stocks slide as lockdown hits
London's FTSE 100 dropped on Monday, as economists slashed their expectations for the global economy this year and a raft of UK-based companies laid out expected hits to profit, cuts in spending and the potential for trouble with rising debt.
The blue-chip index fell 4.2 percent, sinking back into the red after a two-day bounce due to the extraordinary stimulus unveiled by governments and central banks in the UK and beyond last week.
The index was down 35 percent from its peak in January and on course for its worst monthly performance since 1987, while the FTSE MID 250 index of midcap stocks were down over 40 percent from its all-time high.
British Prime Minister Boris Johnson warned on Sunday the government may have to impose curfews and travel restrictions even as pubs, clubs and gyms remain closed, bringing more damage to businesses.
More than 15,000 people have died of the coronavirus worldwide, while nearly 100,000 people have recovered.
For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough, and those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems, and recovery could take six weeks in such cases.