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Soaring Coronavirus Cases Deepen Global Economic Gloom

Global stock markets skidded Wednesday as reports of rising numbers of coronavirus cases deepened the gloom over the likely impact on the world economy.

By Yuri Kageyama for
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Soaring Coronavirus Cases Deepen Global Economic Gloom

A picture from a previous White House briefing on the coronavirus. The United States now has the highest number of confirmed reported COVID-19 cases globally.

Credit: Facebook

Global stock markets skidded Wednesday as reports of rising numbers of coronavirus cases deepened the gloom over the likely impact on the world economy. Within that global context, key markets in the wider Indo-Pacific region were not spared.

France’s CAC 40 fell 4.4 percent to 4,204, while Germany’s DAX shed 3.9 percent to 9,546. Britain’s FTSE 100 dropped 3.8 percent to 5,457 after major banks announced they were scrapping dividend payments, bringing their share prices sharply lower.

U.S. shares were set to drift lower with Dow and S&P 500 futures both dipping 3.4 percent. In Asia, Japan’s benchmark Nikkei 225 dropped 4.5 percent to finish at 18,065.41.

With the number of infections still rising in most regions, “If anything, the worst is yet to come, and some of the world’s largest emerging markets are still to feel the full onslaught of COVID-19,” said Jeffrey Halley, senior market analyst with Oanda.

President Donald Trump warned Americans to brace for a “hell of a bad two weeks” ahead as the White House projected there could be 100,000 to 240,000 deaths in the U.S.

The gloom was apparent in economic indicators around the world. The Bank of Japan’s quarterly survey, or “tankan,” showed sentiment among Japan’s large manufacturers fell in the January-March period, marking the fifth straight quarter of decline. The tankan measures corporate sentiment by subtracting the number of companies saying business conditions are negative from those responding they are positive.

The key index, which measures sentiment among large manufacturers, fell to minus 8 from zero in October-December, the worst result in seven years. Sentiment among non-manufacturers was also dismal as the service sector, tourism and other businesses have also been hit hard by the outbreak.

Australia’s S&P/ASX 200 added 3.6 percent to 5,258.60, while South Korea’s Kospi dipped 3.9 percent to 1,685.46. Hong Kong’s Hang Seng lost 2.2 percent to 23,085.79, while the Shanghai Composite edged 0.6 percent lower to 2,734.52.

India’s Sensex fell 4.7 percent. Shares also fell in Singapore, Malaysia, Indonesia and Thailand.

The surge of coronavirus cases around the world has sent markets to breathtaking drops since mid-February, undercutting what had been a good start to the year. The virus outbreak abruptly put the clamps on the economy. Benchmark U.S. crude oil dropped by roughly two thirds in January-March amid expectations for weaker demand.

On Wall Street overnight, stocks fell, closing out their worst quarter since late 2008, when the S&P 500 lost 22.6 percent.

Markets have cut their losses in recent weeks on hopes that massive aid from governments and central banks around the world can blunt the blow. The S&P 500 was down nearly 31 percent for the quarter at one point, but it has climbed 15.5 percent since last Monday.

Among the next milestones for investors is Friday’s U.S. jobs report, which will likely show a sharp drop in payrolls. Companies soon will begin reporting their earnings results for the first quarter. Analysts are looking for the steepest drop in profits since early 2016, according to FactSet.

The number of known coronavirus cases keeps rising, and the worldwide tally has topped 860,000, according to Johns Hopkins University. The United States has the highest number in the world: more than 189,000 people.

Most people who contract COVID-19 have mild or moderate symptoms, which can include fever and cough. But others, especially older adults and people with existing health problems may get pneumonia and need to be hospitalized. More than 42,000 people have died worldwide due to COVID-19, while more than 178,000 have recovered.

In energy markets, the U.S. benchmark crude contract rose 11 cents to $20.59 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 89 cents to $25.4611 per barrel.

The dollar cost 107.59 Japanese yen, up from 107.52 yen on Tuesday. The euro fell to $1.0941 from $1.1034.

By Yuri Kageyama of The Associated Press.