Global stock markets ended the week in a sea of red — despite the best efforts and pledges of leading central banks and the IMF to stop the selling panic amid the Covid-19 crisis.
And reflecting fears that the world economy is on course for recession, the price of the international benchmark, Brent crude oil slid below $50 a barrel for the first time in two years, while the price of gold soared.
Major stock indices, including the Ftse-100 in London and the Eurostoxx closed on Friday 3.7% lower, a huge slump for a single session in stock market records.
The selling continued for US markets even as the White House economic adviser Larry Kudlow said the US may help some of its businesses most exposed by the virus fallout.
Here, the economic fallout has huge implications for both indigenous Irish firms and Irish-based multinationals and the Iseq index slumped 3% in the session.
Investors are particularly spooked because the emergency interest rate cut earlier this week by the US central bank did little to rally markets, as the deaths rise from the virus.
Futures traders are betting the Federal Reserve will slash US interest rates to near zero by April, even as many doubted the central bank can do much to stop economic damage from the spread of the new coronavirus, Reuters reported.
“The tank has already run dry despite a week of stimulus across central banks, governments and the IMF, “ said Joshua Mahony at online broker IG. “On a week that has seen extraordinary action taken to stem the flow of pessimism, we are yet again heading towards the weekend surrounded by a sea of red,” he said.
IG said: “What was largely a Chinese issue just a month ago, has turned into a global crisis that threatens to throw the world economy into recession.”
Among the airlines, there was some respite for Ryanair and for IAG, the owner of Aer Lingus and British Airways, which notched up gains in the session.
However, in the month that it became clear that the coronavirus was spreading into Europe, Ryanair has slumped by 29%.
Irish Ferries-owner ICG continued its slide, losing 3.3% on Friday, and posting losses of 21% in the past month.
The big loser continues to be Norwegian Air — the transatlantic carrier — whose shares slumped 23% in the session, as fears over its financial health grow. That means Norwegian has lost 67% of its stock market value in a month.
On energy costs, the prices crash on Friday as Russia refused to participate in an Opec plan to cut supply “may mean that the oil market will now enter into a much bigger surplus in the first half of this year”, said Capital Economics.