Global stock markets plunged again as investors signalled that the economic fallouts across the world of a severe coronavirus pandemic could be as bad as the global financial crisis.
Stock markets in Europe and the US flashed red that the spread of the virus beyond Asia would tip some economies into recession.
That has raised the spectre that company earnings will slide and the value of stock market investments that determine the size of pension retirement pots will be severely hit.
The price of oil fell again, a sign that investors believe that the world economy will consume less fuel as economic growth contracts. The Ftse-100 in London lost 246 points, or 3.5%, Euro Stoxx index of large European firms slid 3.6%. "It has been another session of heavy selling, not so much a sea of red as a whole ocean," said Chris Beauchamp, chief market analyst at online broker IG.
"Stocks, the old saying has it, take the stairs up and the lift down, and this has been brutally demonstrated over the past week. Gains that took weeks to acquire have been demolished in the space of hours, as the selling reaches indiscriminate levels," he said.
Ireland's Iseq index fell 3.8%, driven lower by the three bank shares: AIB dropped by 7%, Bank of Ireland shed 4.6% and Permanent TSB slumped by 9%. Transport and airline shares fell again: Irish ferries-owner ING fell 3% and Ryanair by 2.5%. Worst-hit was Paddy Power-owner, Flutter. Its shares tanked by 10%.
Food giant, Kerry Group, which typically investors see as defensive stocks in market sell-off, fell nonetheless, by 3%. The OECD said trade in goods had been already been hit and the disruption from the coronavirus to Asia supply chains "suggests that this downward trend is likely to continue into the first quarter of 2020".
The falls in equity prices and bond yields so far this week reflect fears that coronavirus cases outside China will mark the start of a wider outbreak that deals a blow to the world economy," said Jennifer McKeown, head of the global economics service at Capital Economics in London. "For now, we envisage a moderate hit to global GDP growth of 0.5%, due almost entirely to the impact on China. But the economic effects of a severe pandemic could be as bad as those of the global financial crisis," she said.
Irish pensions adviser Mercer warned about further falls "if the disease becomes a global pandemic and efforts to control the spread further disrupt economic activity" and warning that Irish shares along with world stock markets are likely to remain under pressure for some time.
"Overall, Mercer’s base case remains intact, with global economic growth to return to trend over 2020 and 2021, albeit with higher downside risks than previously anticipated," it said.
A pandemic could lead to "a very strong policy response including lockdowns and travel restrictions, even if they come at a high economic cost", hitting countries that rely on tourism, in particular, Mercer said.
Meanwhile, the British Irish Chamber of Commerce expressed "grave concern" with the tough talking from the UK in the EU trade talks. “Businesses in Ireland and the UK are worried by the divergence that is emerging between the Political Declaration agreed last year and the positions adopted this week,” it said.