On Monday, oil prices plummeted by 8% and world shares stumbled as widespread fear climbed amid the possible prolonging of the global coronavirus shutdown.
Fears that restricted measures around the world would need to remain in place for months sparked the downturn.
Australian equities (ASX200) jumped by 7% following the government’s decision to launch a support programme worth $130 billion (AUD) to help save jobs.
However, Japan’s Nikkei 225 fell by 1.6% in early trade, adding to what has already been the region’s worst quarter since 1987. Shanghai blue chips were down 0.9% and there were sharper drops in Southeast Asia, with Singapore’ benchmark index down almost 3%.
Wall Street futures have fallen back into the red after tentatively being up by as much as 1% in Asian markets during a brief stint of optimism.
The decline in oil caused levels to fall to their lowest since 2002. Brent was at only $22 a barrel, negatively impacting petro currencies such as Russia’s rouble, Mexico’s peso and the Indonesian rupiah by as much as 2%.
On Friday, Britain had become the first major economy to have its credit rating cut because of the coronavirus.
“I have been in this business almost 30 years and this is the fastest correction I have seen,” Lombard Odier’s Chief Investment Officer Stephane Monier said of this year’s plunge in global markets.
JPMorgan now predicts that global GDP could contract at a 10.5% annualised rate in the first half of the year.