13 March 2020 : Things just got even worse for financial markets as rising panic surrounding the coronavirus pandemic pummelled equities across the globe.

Asian shares continued the global slump on Friday plunging deeper into the abyss, while European markets posted their worst one-day drop in history yesterday. Overnight, the sell-off on Wall Street was so severe that the Dow and S&P 500 experienced their biggest one-day declines since 1987, after triggering circuit breakers for only the second time in one week.

Markets are highly volatile with Trump’s travel ban on 26 European countries clearly adding more fuel to the fire, now global stocks are ablaze. It seems the ongoing uncertainty from the coronavirus outbreak is set to continue burning the outlook for the global economy.

What is more alarming is that these gut-wrenching declines across stocks have come despite emergency action by the Federal Reserve, Bank of England and European Central Bank to rescue markets. There seems to be little faith over the effectiveness of monetary policy shielding the economy from the impact of the coronavirus, with fiscal measures seen as a better alternative in stabilising conditions.

Markets currently remain in panic mode with risk aversion the dominant theme. Equities across the globe are likely to remain severely depressed amid the darkening mood, with safe-haven assets like the Dollar and Japanese Yen, the best destinations for safety.

Reporting for EasyKobo on Friday , 13 March 2020 in Lagos, Nigeria

Source : Lukman Otunuga, Senior Research Analyst at FXTM