The travel ban imposed on EU by the US for coronavirus compelled the stocks in Asia to fall
On Thursday, stocks in Asia traded lower as we can see a sharp fall after Donald Trump, the US president imposed restrictions on people traveling from mainland Europe to the US in an effort so that the coronavirus spread is slowed down.
The chain of events has been followed by a steep loss on Wall Street as Dow Jones plunged almost 5.8% or 1,500 points. The Dow is way behind its recent high with a more than 20% dip and has reached a threshold that is often accompanied by a recession.
Earlier, the outbreak of the coronavirus has been declared a pandemic by the World Health Organization.
Nikkei 225, the benchmark of Japan fell in the morning trade by 5% while there is a loss of 3% incurred by Hang Seng in Hong Kong and there is a 1% drop in Shanghai Composite in China.
After the ban on travelers was announced by Mr. Trump for 30 days that will start on Friday, for entering into the United States from 26 European countries, there has been a huge fall to fight the outbreak of the coronavirus.
From the Oval Office, a televised address came from Trump who said that the UK is not under any kind of restrictions and it will not be applied to them.
In that particular announcement, US workers are given financial relief who fell ill and has been caring for others who are suffering from the illness and has been quarantined. The tax payments will be deferred without any penalties and interests for certain individuals and businesses that have been affected by the US Treasury Department as a part of the emergency action and they are working for hours to see through the situation. Liquidity and capital are provided by the US government at the same time too small firms that are affected by the flared-up epidemic.
Earlier, the stock indexes in the US closed sharply lower, as 5.8% is lost by Dow Jones Industrial Average, Nasdaq down by 4.7% and the S&P 500 is 4.9% lower.
It implies that Dow is 20% below its recent high now that has pushed it into something called a ‘bear market’. That has brought an end to the streak of gains which is the longest ever for US stocks, that started in the year 2009.
A senior economist at the Moody’s Analytics, Katrina Ell said that the virus is not the only cause but the panic and fear that is related to the outbreak of the virus and the altered economic behavior that is associated with it could be a tipping point which is damaging as the global economy is forced to a darker path.
With the oil prices plunging, the markets have also slammed down this week after the outputs are going to be raised by the oil exporters rather than going for cuts that are well coordinated. The prices of oil slipped down by more than 5% after the address made by Mr. Trump.
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