LONDON (Reuters) – Global stocks plunged into a bear market and oil slumped on Thursday after U.S. President Donald Trump banned travel from Europe to stem the spread of coronavirus, threatening more disruption to the world economy.
With the pandemic wreaking havoc on the daily life of millions, investors were also disappointed by the lack of broad measures in Trump’s plan to fight the virus, prompting traders to bet on further aggressive easing by the U.S. Federal Reserve.
“He (Trump) did not announce any new concrete measures such as a large-scale payroll tax cut to buffer the economy against the impending coronavirus slowdown,” said Jeffrey Halley, senior market analyst at OANDA.
“That has probably disappointed markets more than anything.”
European shares plummeted to their lowest in almost four years, with the benchmark STOXX 600 index falling 6% by midday in London. Travel and leisure stocks shed 9.9%, hitting their lowest in more than six years. .SXTP
The falls pushed the MSCI All-Country World Index .MIWD00000PUS, which tracks stocks across 49 countries, into bear market territory, down 20% from its 52-week peak.
The index was down over 2% on the day.
Investors also rushed into safe-haven assets, from bonds to gold to the yen and the Swiss franc. Bitcoin plunged 25%, amid wild volatility in cryptocurrency markets. BTSP=BTC
U.S. S&P 500 futures ESc1 plummeted as much as 5% in European trading hours, a day after the S&P 500 .SPX lost 4.89%, leaving the index on the brink of entering bear market territory, defined as a 20% fall from a recent top.
The VIX volatility index — Wall Street’s “fear gauge” — and an equivalent measure of volatility for the Euro Stoxx 50 .V2TX hit their highest levels since the 2008 financial crisis.