Global markets volatile after historic dive on Wall Street

Global stock markets remained volatile on Tuesday after a brutal sell-off that gave the US market its worst loss in over 30 years, with many economies grinding to a standstill in hopes of containing the spread of the coronavirus.

Major indexes in Europe lost early gains after Asian markets largely logged solid increases.

US futures wobbled between gains and losses as investors sought to gauge how vast and deep the economic damage will be and how swift governments will ramp up rescue measures.

Analyst Jasper Lawler of trading platform LCG said: “Details as yet are sparse. Investors are pinning their hopes on governments flooding people and businesses with enough cash to survive months of a coronavirus-induced lockdown.”

A measure of market volatility was at a record high at the end of Monday, suggesting the wild swings could continue while it is unclear how long the outbreak will last.

The CAC 40 in Paris was down 0.8% to 3,852, after being up more than 3% earlier, when the government announced £40 billion in aid for individuals and businesses. Germany’s DAX shed 1% to 8,650.

Futures for the S&P 500 climbed 2.5% while the future for the Dow Jones Industrial Average added 2.6%.

Earlier, Asian stocks largely closed higher.

Australia’s benchmark jumped 5.8% after a 7% plunge on Monday as investors snapped up miners and banks. Tokyo’s Nikkei 225 climbed 0.8% at one point but barely eked out a gain, adding less than 10 points to 17,011.53.

The rise in US futures comes after the Trump administration said it plans strong support for airlines stricken by the outbreak. It is also pushing the US senate to enact a massive stimulus package to alleviate losses for businesses and individuals affected by the illness, which has infected more than 182,000 people worldwide, with 4,661 cases in the United States.

The Nikkei 225 in Tokyo rose to 17,011.53, while Hong Kong’s benchmark jumped 0.9% to 23,263.73.

Sydney’s S&P/ASX 200 jumped to 5,293.40, while the Shanghai Composite index sank 0.3% to 2,779.64.

The Sensex in Mumbai rose 0.2% to 31,434.96. The Kospi in South Korea dropped 2.5% to 1,672.44. Shares also fell in south-east Asia.

The Philippine stock market was closed as of Tuesday after the government imposed restrictions on movement in the capital.

Oil prices also rose Tuesday, with U.S. benchmark crude up 2.5%, or 74 cents, to 29.44 dollars per barrel in electronic trading on the New York Mercantile Exchange.

It plunged 3.03 dollars to 28.70 dollars on Monday. Brent crude, the international standard, picked up 0.5%, or 19 cents, to 30.24 dollars per barrel.

Analysts said bargain hunters appeared to be buying crude to help fill government oil reserves, anticipating China’s economy will get a boost from massive stimulus yet to be announced.

Recent losses in global markets have been the worst since the 2008 financial crisis.

Monday’s 12% drop for the S&P 500, its worst day in more than three decades, came as voices from Wall Street to the White House said the coronavirus may be dragging the US economy into a recession.

The S&P 500 shed nearly 30% since setting a record less than a month ago, and it is at its lowest point since the end of 2018.

Monday’s precipitous losses accelerated in the last half hour of trading after US president Donald Trump said the economy may be headed for a recession and asked Americans to avoid gatherings of more than 10 people.

The Dow Jones Industrial Average plunged 2,997 points, or 12.9%.