- World stock markets fell for a third day running on Thursday after a sobering warning from the WHO that the coronavirus may never go away.
- The $3 trillion stimulus bill introduced by the Democrats seems to have run aground with senate Republicans in USA.
LONDON (Reuters) – World stock markets fell for a third day running on Thursday after a sobering warning from the World Health Organization that the coronavirus may never go away.
The head of the Federal Reserve quashed talk of U.S. interest rates going negative to kickstart investment and new outbreaks of the virus in South Korea and China and some dour assessments of the global economy aroused concern too.
Europe's main bourses sank 1.5% in early moves as traders once again took shelter in safe-haven government bonds.
“The path ahead is both highly uncertain and subject to significant downside risks," the Fed Chair Jerome Powell said of the economy, as he warned of a recession worse than any since World War Two.
His suggestion that the Fed's firepower may not be sufficient to avert deep damage also clearly spooked markets. He called for additional fiscal support but a $3 trillion stimulus bill seems to have run aground with senate Republicans for now.
Asian markets had followed Wall Street lower overnight with MSCI's broadest index of Asia-Pacific shares finishing down .MIAPJ0000PUS 1.3% and Japan's heavyweight Nikkei .N225 closing 1.75% in the red.
“We don't think the market is going to re-test the lows, but it's probably seen its best also, so I'm expecting a correction," said Tony Huntley, chief investment officer at Melbourne-based fund manager Adansonia Capital.
“The issue is whether we get a second wave (of coronavirus infections) … that would be my greatest fear."
China has re-imposed movement restrictions near its borders with North Korea and Russia after a new outbreak was detected there and South Korea is working to contain an outbreak centred around bars and nightclubs in Seoul.
“It is important to put this on the table: this virus may become just another endemic virus in our communities, and this virus may never go away," WHO emergencies expert Mike Ryan told an online briefing on Wednesday.