Global market: Europe suffers worst day since mid-2016

LONDON: European shares suffered their biggest slump since mid-2016 on Monday and oil plunged almost 5% as a jump in coronavirus cases in Italy, South Korea, Japan and Iran sent investors scrambling to the security of gold and government bonds.

Wall Street dived around 3% after it opened as the ugly sell-off spread. Europe had seen Milan’s stock market plummet over 5.5% after a spike in cases of the virus left six dead in Italy and parts of the country’s industrial north in virtual lockdown.

Frankfurt and Paris both fell more than 4% and London’s FTSE dropped 3.8%, wiping at least $400 billion off the region’s market value in a few short hours. The flight to safety was just as resounding, gold surging 2.5% to a seven-year high of $1,680 an ounce.

Bonds rallied too. Ten-year US Treasury yields dropped below 1.36% for the first time since July 2016. The 30-year Treasury touched a record low at just under 1.81% and German yields dropped to -0.48%, their lowest in more than four months.

Published in The Express Tribune, February 25^th, 2020.

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