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Stock Market Today LIVE Updates: Sensex down 219 points, Nifty falls in opening session; RIL increases 5%
Washington / New York: Asian equity markets plunged on Wednesday when the floor fell below US crude prices, exposing the deep damage the coronavirus pandemic has had to global economic demand.
Scary investors sought the security of public debt and even threw safe-haven gold as Brent oil futures sank for the second day, fueled by increasing global oil saturation.
Australian S & P / ASX 200 futures lost 2.1 percent in early trading, while Japanese Nikkei futures were up 0.21 percent.
The collapse in U.S. crude oil prices has given new urgency to bearish voices saying the alarm sounds for global growth and preparing for a catastrophic collapse in asset prices as the COVID pandemic- 19 destroys the world economy.
Earlier in its week, the May WTI futures contract in the United States collided with negative prices for the first time in history. In addition to concerns about oversupply, analysts say the drop also highlights the technical limitations the market faces in responding to crises.
“The negative price for the May WTI futures was probably an anomaly, but it was also a symptom of more important underlying problems that the industry must address,” said Arij van Berkel, who heads the energy research team at Lux Research at Amsterdam. “Although the oil industry theoretically has a diversified product portfolio, the current situation shows that its ability to change markets is extremely limited.”
The Nikkei 225 Index closed 1.15 percent at 19,669.12 on Tuesday. The futures contract has fallen 2.64 percent since that close.
Hong Kong Hang Seng index futures were down 1.31 percent.
On Wall Street, the Dow Jones Industrial Average fell 2.67 percent to 23,018.88, the S&P 500 lost 3.07 percent to 2,736.56, and the Nasdaq Composite fell 3.48 percent to 8,263.23 .
Representative image. Reuters
The pan-European STOXX 600 index lost 3.39 percent and the MSCI worldwide stock indicator lost 3.01 percent.
As the difficulties of restarting the United States economy sank, United States Treasury yields fell, and the five-year note reached a new all-time low in rising bond prices: one of the safer assets.
The US dollar rose to a two-week high against a basket of currencies as investors fled from riskier assets for the world’s most liquid currency and put pressure on oil-related currencies such as the Norwegian krone and the Canadian dollar.
Investors face global excess supply that is expected to exceed demand for months or even years, and current production cuts to offset that excess are not enough.
US crude recently rose 124.08 percent to $ 10.01 a barrel, while Brent oil futures prices plunged again to $ 19.82 on Tuesday, 22.49 percent lower on the day, as the panic spread to a second day.
Both Saudi Arabia and Russia said on Tuesday they were ready to take additional steps to stabilize oil markets along with other producers, but have yet to take action.
Investors have become increasingly cautious in the face of economic damage from radical blockades that have halted US business activity and caused millions of layoffs.
Governors of approximately half a dozen of the United States. States, including Georgia and South Carolina, are moving ahead with plans to begin a partial restart of their economies despite warnings that prematurely loosening of restrictions could lead to a further increase in infections.
Meanwhile, the United States Senate unanimously approved $ 484 billion in additional coronavirus relief on Tuesday for the United States economy and hospitals treating patients sick with the pandemic, sending the measure to the House of Representatives for your final approval later this week.
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