Asian shares plunged, then recovered slightly as Friday the 13th brought still more turmoil to markets reeling from uncertainty over the coronavirus crisis.
Benchmarks in Japan, Thailand and India sank as much as 10% following Wall Street’s biggest drop since the Black Monday crash of 1987.
Tokyo’s Nikkei 225 fell nearly 6%. India’s Sensex swung between gains and losses after a 10% crash briefly halted trading.
In Bangkok, the Thailand SET gained 0.5% after a temporary suspension of trading earlier in the day.
Markets worldwide have retreated as fears of economic fallout from the coronavirus crisis deepen and the meltdown in the US, the world’s biggest economy, batters confidence around the globe.
But there were signs government action was beginning to resonate with panicked investors as some ventured back into markets in search of bargains.
Global markets appear to have been tipped over into a sell-everything modJingyi Pan, market analyst
In Australia, the S&P/ASX 200 jumped 4.4% to 5,539.30 after state leaders agreed to increase spending to counter the impact of the viral outbreak that has spread from central China across the globe, infecting 128,000 people.
“The governor of the Reserve Bank made it very clear this morning the levers of fiscal policy need to do their job here,” Prime Minister Scott Morrison said after a meeting of top officials.
“We need to put budgets to work to keep people in work,” said Morrison, whose federal government has already pledged $11.4 billion (£5.7 billion) in stimulus.
Losses narrowed in mainland China, where communities are recovering from the worst of the virus. The Shanghai Composite index fell 1.5% to 2,880.14.
Overnight, the sell-off on Wall Street helped to wipe out most of Wall Street’s major gains since President Donald Trump took office in 2017.
The S&P 500 plummeted 9.5%, for a total drop of 26.7% from its all-time high, set just last month.
That puts it clearly over the 20% threshold for a bear market, officially ending Wall Street’s unprecedented bull-market run of nearly 11 years.
The Dow Jones Industrial Average sank 2,352 points, or 10%, its heaviest loss since its nearly 23% drop on October 19, 1987.
European markets fell 12% in one of their worst days ever, even after the European Central Bank pledged to buy more bonds and offer more help for the economy.
“Between the lack of a strong US fiscal response and the latest travel ban for arrivals from Europe to the US, global markets appear to have been tipped over into a sell-everything mode,” Jingyi Pan of IG said in a commentary.
Overriding concerns about the actual impact on business and trade is pessimism over how the crisis is being handled, with the “sum of all fears are culminating with the view that policymakers remain well behind the curve”, said Stephen Innes of AxiCorp.
Not all markets have suffered equally, but many are down by double-digits from just weeks earlier.
Thailand’s SET has lost nearly 40% and the Philippines’ benchmark is down more than 30%.
Despite the slight improvements in some markets, gloom prevailed in Asia on Friday, with Tokyo’s Nikkei 225 down 6.1% to 17,431.05. The Kospi in South Korea sank 3.6% to 1,769.81,
In Hong Kong, the Hang Seng lost 3.8% to 23,377.07. Shares fell in Southeast Asia.
Stocks fell so fast on Wall Street at Thursday’s opening bell that they triggered an automatic, 15-minute trading halt for the second time this week. The so-called circuit breakers were first adopted after the 1987 crash, and until this week hadn’t been tripped since 1997.
The Dow briefly turned upward and halved its losses at one point in the afternoon after the Federal Reserve announced it would step in to ease “highly unusual disruptions” in the Treasury market and pump in at least $1.5 trillion to help calm the market and facilitate trading.
But the burst of momentum quickly faded.