The Dow Jones Industrial Index plunged to its biggest fall in history as sharemarkets across the world suffered further losses with concerns growing that the coronavirus cannot be stopped

By Ian Horswill

Posted on February 28, 2020

The US share market’s Dow Jones Industrial Index rallied briefly after five successive days of falling stocks until California Governor Gavin Newsom announced 8,400 potential coronavirus cases are being monitored in the state.

It then plunged to its biggest fall in history. The Dow Jones Industrial Index, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the US, has now fallen 12% this week from a record high.

The tech-dominated Nasdaq index tumbled by 4.6%, its worst daily loss since 2011, also from a record high.

The last six days saw the S&P 500 in the US drop by 10% at a rate faster than it ever has before, according to Deutsche Bank Securities.

More than US$300 billion (UK£233 billion) was wiped off the value of European shares during the trading session, with the Stoxx 600 suffering its second biggest daily fall since the Brexit referendum in 2016, The Telegraph reported. The index was at record highs last week, but dropped sharply on Monday and Tuesday. Markets bounced back slightly on Wednesday before resuming their plunge yesterday.

The Australian market is down for the fifth day running, with the benchmark ASX200 index dropping almost 3.3% shortly after the opening bell on Friday. Tokyo’s key Nikkei index plunged more than 3 per cent in early trading on Friday.

With financial markets reacting to the spread of the coronavirus, COVID-19, World Health Organisation Director-General Dr Tedros Adhanom Ghebreyesus warned the coronavirus outbreak has reached a “decisive point” with “pandemic potential”.

Dow Jones, Tedros Adhanom Ghebreyesus

“We are actually in a very delicate situation in which the outbreak can go in any direction based on how we handle it,” Dr Tedros said.

“This is not a time for fear. This is a time for taking action to prevent infection and save lives now.”

The virus has now infected more than 82,000 people in almost 50 countries and its rapid spread beyond the epicentre of China is causing concern.

“It’s what’s happening in the rest of the world that’s now our greatest concern,” Dr Tedros said.

Iran and Italy have become centres of infection outside of China, with people travelling from there spreading the coronavirus further afield. Italy has quarantined 11 towns and Iran has urged its population to avoid making unnecessary trips within the country and cancelled Friday prayers in Tehran and other cities.

Japan and Iraq have joined China and Hong Kong in closing all its schools.

Saudi Arabia is stopping foreign pilgrims from entering the country and Australia is extending a ban on foreign visitors from mainland China.