As you already know, the world is facing a silent enemy, that is slowly taking over our lives: Covid-19, largely known as Coronavirus. First starting in China, the virus took over the world lighting fast, more than 4,400 deaths, and 120,000 people are reported of being infected.
What Coronavirus is
There is an increase in both infected and dead all over the world. Italy is the most affected country outside of China, and now more than 60 million have been put under national quarantine. Drastic measures have been taken as: traveling restrictions, all public events were banned, public schools have been closed, and all religious services have been put on hold.
So far, Italy has 12, 000 cases and around 600 deaths, the biggest numbers outside of China. Borders with Switzerland are closed. In the light of the dramatic numbers, the Italian stock exchange dropped 11%, Italy40.
Also, in Spain over 2000 cases of Covid-19 have been reported, with more than 50 deaths. Authorities have banned large events in Madrid, Basque Country and La Rioja.
In U.S. the virus is spreading rapidly too. The country has now over 1,000 cases, and more than 30 deaths, across 36 states.
How the market took the bullet
Some of the biggest economies have taken measures to diminish the impact of Coronavirus on the market. Bank of England cuts interest rate by 0.50% to 0.25% to support an economy that is set to be hurt by the spreading of Coronavirus, UK100.
German chancellor, Angela Merkel said that “solidarity and reason” are central to the country’s response to the virus. Around 60%-70% of Germany is likely to be infected because the virus is new, and there is no vaccine or treatment, population having no immunity against it. The German budget committee had pledged $1.1 billion to tackle the outbreak, Germany30.
In Italy, mortgage payments will be suspended, and the government said it would inject €10 billion into the economy.
In Australia, the government has unveiled a comprehensive $2.4 billion health package to protect the citizen, including vulnerable groups such as the elderly, those with chronic conditions and Indigenous communities, from COVID-19, Australia200.
Even though rebounds are seen all over the world, and maybe the light at the end of the tunnel can be seen, all major stock indices are still down. More and more people are talking about a possible repeat of the 2008 economic crisis. Here is how major European indices and stocks have been doing:
- The Europe 50 was retreating by more than 7%
- UK slid nearly 7%
- Germany 30 fell 6.7%
- France40 fell 8%
- Spain35 fell almost 8%
- Shares on Air France fell 9%
- BP fell 20%
Gold is at its highest since 2016.
Since the European outbreak, Milan stock exchange dropped over 11%, and all over Europe, indices were down more than 2%.
As said before, some changes were seen on the European market
The Russian Rouble tumbled about 8% to its weakest level since 2016 against the U.S. Dollar, being at low exchange rate of 72.007RUB for $1.
After a bloodbath on Monday, with indexes dropping more than 7%, and some shares dropping more 6%, the U.S. Crude Oil Futures rose over 7%, amid signs of an increasing price war between Saudi Arabia and Russia, after Oil market crashed more than 30%, being at its lowest since 1991.
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Sources: marketwatch.com, forexlive.com, aljazeera.com, health.gov.au
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