Coronavirus: Australian shares suffer worst fall on record as Asia slides
Australian shares today suffered their biggest daily fall on record as analysts warned the global economy was teetering on the brink of a recession.
The benchmark ASX200 index closed down 9.7 per cent as the coronavirus outbreak continued to roil global markets.
The ASX200 has fallen roughly 30 per cent since its highest in February and the Reserve Bank of Australia has said it “stands ready” to buy government bonds to help stabilise the market.
The virus has also taken its toll on stocks across Asia, with indexes in the red across the board this morning.
Japan’s Nikkei 225 was down almost 2.5 per cent this morning, while Hong Kong’s Hang Seng index slipped just shy of three per cent. The Shanghai Composite dropped 3.4 per cent.
It came even as central banks ramped up their efforts to mitigate the impact of coronavirus.
Last night the US Federal Reserve cut interest rates to almost zero, saying it was “prepared to use its full range of tools”.
In an intervention not seen since the financial crisis, the Fed dropped its rate to between 0.0 and 0.25 per cent, just days after its initial 50 basis point cut.
New Bank of England boss Andrew Bailey is also thought to be considering another interest rate cut after slashing the base rate from 0.75 per cent to 0.25 per cent — the lowest on record — last week.
However, investors are concerned that central banks are running out of ways to deal with the crisis.
Fitch Solutions today warned the global economy was “knocking on recession’s door”.
Analysts said they had revised forecasts lower for over 30 countries over the last two months as a result of coronavirus and now forecast the global economy to slow by 2.2 per cent — its slowest rate since 2009.