Hong Kong: Equities and oil prices fell through the floor again on thursday after Donald Trump banned all travel from Europe to the US for a month to fight the coronavirus, ramping up fears the global economy will careen into recession.
As the disease showed no signs of abating, claiming more lives and infecting more people around the world, the US president said in a rare address to the nation that the ban would be in place for 30 days.
The news came after the World Health Organization officially labelled the outbreak a pandemic and hit out at “alarming levels of inaction” for its spread.
Asian equity markets, already deep in the red in reaction to the WHO announcement, fell further after Trump's address.
Tokyo dropped more than five percent, while Hong Kong, Sydney, Seoul, Wellington, Taipei, Jakarta and Manila all tanked more than four percent The Japanese yen, a key haven in times of crisis and economic turmoil, jumped more than one percent against the dollar.
“Travel restrictions equal slower global economic activity, so if you need any more coaxing to sell... after a massively negative signal from trading in US markets it just fell in your lap,” said AxiCorp's Stephen Innes.
Trump said the continent had seen a surge in new cases because governments failed to stop travel from China, where the COVID-19 epidemic began.
Crucially, he said the prohibitions would also “apply to the tremendous amount of trade and cargo,” and “various other things as we get approval”.
Oil prices were also hammered, with both main contracts falling around six percent. The oil market was already under pressure after Saudi Arabia and Gulf partner UAE stepped up a price war with plans to flood the global markets.
The coronavirus outbreak has left virtually no sector untouched, though travel and tourism have been particularly hard-hit as countries institute travel bans and quarantine requirements.
