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Aussie stock markets tumble on coronavirus fears

The ASX200 is having a rough start to the week. Images: Getty

The S&P/ASX200 finished 0.75 per cent lower on Wednesday after a chaotic day on the stock market brought on by coronavirus fears.

It plunged at the open before rebounding as Asian markets opened trading.

What happened today?

The Australian share market was off to another rough start this morning, diving more than 2 per cent in minutes in early Monday trade.

Australian stocks plunged 2.88 per cent on Monday morning wiping more than $50 billion from the national share market and taking it to a nine-month low.

The poor performance comes amid increased anxiety over the coronavirus’ spread and marks the seventh day of share market troubles. The ASX last week shed a huge $210 billion.

Globally, the coronavirus panic wiped US$5 trillion from global markets last week, in one of the worst weeks since the Global Financial Crisis

Monday morning trade

The S&P/ASX200 index was down 140.4 points, or 2.18 per cent, at 6,300.8 at 1015 AEDT while the broader All Ordinaries index plummeted 147.3 points, or 2.26 per cent, to 6,364.2 points.

The ASX result comes after US stocks fell on Friday after the Australian share market suffered its worst day in over four years, closing the day at a six-month low due to fears about the impact of the coronavirus on global growth.

The Australian dollar was buying 64.69 US cents at 1015 AEDT on Monday, down from 65.22 US cents as the market closed on Friday.

Coronavirus fears hammer global stocks

Traders work before the closing bell at the New York Stock Exchange (NYSE) on February 28, 2020 at Wall Street in New York City. - Losses on Wall Street deepened following a bruising open, as global markets were poised to conclude their worst week since 2008 with another rout. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

COVID-19 claimed its first Australian life over the weekend, after elderly Perth man James Kwan died on Sunday. Worldwide, coronavirus has infected more than 88,000 people and killed more than 3,000, with clusters in northern Italy and Iran raising alarm. 

The respiratory illness’ spread is also causing significant difficulties for the Chinese manufacturing sector. 

China’s manufacturing sector recorded its worst activity on record in February, with the manufacturing purchasing managers’ index (PMI) plunging from 50 in January to 35.7 per cent in February. That figure is well below what economists had predicted

“The sharp drop in China’s manufacturing PMI in February reinforces our view that the normalization in economic activity will be delayed,” said ANZ economist Xing Zhaopeng. 

Bank of America economists also warned 2020 could be one of the worst years for global markets since 2009. 

The Bank expects global growth to shudder to 2.8 per cent, 0.3 per cent lower than expected and on par with 2009 growth rates. 

"Our forecasts do not include a global pandemic that would basically shut down economic activity in many major cities,” the economists added last week. 

Australia’s financial war table

RBA Governor Philip Lowe. Image: AAP

Australia’s financial regulators will hold an emergency meeting on Monday to discuss the coronavirus outbreak and its potential impact on Australia’s $2 trillion economy, according to Reuters.

Australia’s GDP figures are due to be released on Wednesday, along with a raft of economic data including retail sales and building approvals. 

The gathering comes ahead of the Reserve Bank of Australia’s (RBA) monthly board meeting on Tuesday, with experts now expecting a cut.

  • With AAP.

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