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Actions in Asia sink after US ban on Europe over coronavirus

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Actions in Asia sink after US ban on Europe over coronavirus

The Tokyo benchmark, Nikkei, lost 5.42% or 1,051.88 points to 18,364.18.

Tokyo, Japan:

Stock markets tumbled Thursday after U.S. President Donald Trump announced a 30-day travel ban to the United States from Europe due to the coronavirus.

Asian markets were already a sea of ​​red in the open air, traders taking their example in a global rout when the World Health Organization declared that the spread of the new virus was officially a pandemic.

But Trump’s announcement of the 30-day ban, which excludes Britain, has sparked new sales, despite a series of measures to ease the financial pain of the epidemic, which paralyzed travel and struck businesses around the world.

The Tokyo benchmark, Nikkei, fell 5.42% or 1,051.88 points to 18,364.18, while the broader Topix lost 5.06% or 70.15 points to 1,314, 97 within an hour of Trump’s speech.

The Australian ASX fell 5.4%, while Hong Kong fell 3% at the start.

The news also pushed up the yen as the safe haven currency increased as uncertainty persisted. The dollar reached 103.63 yen at 01:30 GMT, against 104.57 yen in the first Asian exchanges.

“Trump’s travel ban: sell, sell, sell is heard in Asian trading rooms,” wrote Stephen Innes, chief global market strategist at AxiCorp.

“Travel restrictions correspond to slower global economic activity, so if you need more coax to sell … after a massive negative signal from the night trade in the US markets, it just fell on your lap “, he added.

The losses followed another brutal session in the US markets, with a wave after a wave of bad news, including Hilton withdrawing its profit forecasts and Boeing saying it would suspend most hiring and overtime.

The coronavirus epidemic has left virtually no area untouched, although travel and tourism have been particularly hard hit as countries institute travel bans and quarantine requirements.

“The markets are screaming”

The Dow Jones Industrial Index plunged around 1,465 points, or 5.9%, to 23,553.22 on Wednesday, in a bruising session that left the index more than 20% below its peak, which is doing a bear market.

Major European stock markets also fell, including the FTSE 100, which fell 1.4%, despite the fact that the Bank of England lowered its key rate to a record level and the government promised 39 billion dollars of fiscal stimulus.

Analysts said the markets were struggling under the weight of two crises: the burgeoning coronavirus epidemic and the oil price war.

Oil prices also fell sharply after Trump’s comments, plunging by more than 5%.

The oil market was already under pressure after Saudi Arabia and the Gulf partner, the UAE intensified a price war with plans to flood world markets.

The move is the latest escalation in a fight between oil producers after Russia backed down from an OPEC-backed plan to cut production in response to the loss of demand for the coronavirus.

“The virus itself continues to spread in Europe and the United States, which means that more extensive containment measures are likely, which will weigh more heavily on global growth,” said Tapas Strickland, senior analyst at the National Australia Bank.

“The markets are demanding a coordinated response to the headwinds of COVID-19 and a lack of American political action is agitating the markets,” he said.

Trump’s speech included several measures to ease the financial burden, especially for small businesses, including lower payroll taxes and deferred tax payments.

But the measures did not appear to be enough to convince investors, although Innes said intensifying US action could herald “an avalanche of global tax action at all levels” which could potentially encourage markets.

(With the exception of the title, this story was not edited by NDTV staff and is published from a syndicated feed.)

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