Global markets and oil prices remain fairly stable on Tuesday after coronavirus panic caused Wall Street’s worst one-day sell-off since the Black Monday crash of 1987.
In Europe, early 1.5. % to 3% gains in London, Frankfurt, and Paris were quickly wiped out as airline and travel stocks plunged heavily.
The dollar recouped some lost ground against the safe-haven Japanese yen. Oil gave up attempted gains after Brent’s drop below $30 a barrel on Monday.
Financial markets panicked on Monday with the S&P 500 falling 12%. Emergency central bank rate cuts globally only added to investor panic.
About $2.7 trillion in market value was wiped from the S&P 500 on Monday as it suffered its third-largest daily percentage decline on record. Over the past 18 days, the benchmark index has lost $8.3 trillion.
(READ MORE: Oil price crash, Coronavirus: The trouble that lies ahead for Nigeria)
Gold, which is normally bought as a safe haven, extended declines on Tuesday as some investors chose to sell whatever they could to keep their money in cash.
The U.S. Federal Reserve stunned investors with another emergency rate cut on Sunday, prompting other central banks to ease policy in the biggest coordinated response since the global financial crisis more than a decade ago.
Investors, however, are worried that many have used up their ammunition and that more draconian restrictions on personal movement are necessary to contain the global coronavirus outbreak.
Group of Seven finance ministers is expected to hold a meeting on Tuesday night. Markets want to see public health progress as well as fiscal stimulus. The safety of national citizens might become a bigger priority. But with that, they want to keep the economies in a working situation.
(READ MORE: Oil price slumps further to $30, as Nigeria grapples with high production cost)
Others say liquidity in the capital markets is starting to fall because there’s such a high degree of uncertainty, meaning even some of the usual safe havens like gold, bonds may not be that safe.
The American dollar, which had fallen last week as the Federal Reserve wiped out the greenback’s interest rate premium, is now gaining sharply as investors put an increasingly high trust on the world’s most liquid and trusted financial asset. By 12.1pm Nigerian local time, the dollar index, which tracks the greenback against a basket of developed-market currencies, was up 0.8% at 98.97.