Bullish indicating open at $55-$60, IPO prices at $37
* MSCI ACWI down over 10%, Wall St selloff intensifies
* Fed rate cut next month priced in
* Global stock markets lose the value of Japan's GDP in a
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Updates prices, comment; changes byline, dateline; previous
LONDON)
By Rodrigo Campos
NEW YORK, Feb 28 (Reuters) - Coronavirus panic sent world
stock markets tumbling again on Friday, putting them on course
for their largest weekly fall since the 2008 global financial
crisis, with over $5 trillion wiped from global market value so
far this week.
The rout showed no signs of slowing and the ongoing dive for
safety sent yields on U.S. government bonds, widely seen as the
world's most secure asset, to record lows. US/
Disruptions to international travel and supply chains,
school closures and cancellations of major events have all
blackened the outlook for a world economy that was already
struggling with fallout from the U.S.-China trade war.
Hopes the epidemic, first detected in China in December,
would be over swiftly and economic activity quickly return to
normal have been shattered as the World Health Organization
warned it could spread worldwide. The Dow Jones Industrial Average .DJI fell 588.05 points,
or 2.28%, to 25,178.59, and the S&P 500 .SPX lost 55.33
points, or 1.86%, to 2,923.43.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
2.42% for a weekly loss of over 11%, it's second largest on
record.
The over $5 trillion lost in market cap is roughly
equivalent to Japan's yearly GDP, the third-largest in the
world.
In Asia, MSCI's regional index excluding Japan
.MIAPJ0000PUS shed 2.6%. Japan's Nikkei .N225 slumped 3.7%
on rising fears the July-August Tokyo Olympics may be called off
due to the coronavirus.
The CSI300 index of Shanghai and Shenzhen shares .CSI300
dropped 3.5% bringing its weekly loss to 5%, the largest since
April.
RATE CUTS PRICED IN
About 10 countries have reported their first virus cases
over the past 24 hours, including Nigeria, the biggest economy
in Africa.
Expectations the Fed will cut interest rates to cushion the
blow are rising in money markets. Fed funds futures 0#FF: are
now fully pricing in a rate cut next month, with the question
only being how large it will be. The European Central Bank historically lags the Fed but it
is now seen cutting by another 10 basis points by June.
The yen's luster shined, with the Japanese currency rising
by the most for any week since mid-2016.
On Friday the yen JPY= strengthened 1.25% versus the
greenback at 108.25 per dollar.
The dollar index =USD fell 0.097%, with the euro EUR= up
0.02% to $1.1. Sterling GBP= was last trading at $1.2781, down
0.80% on the day.
The appeal of guaranteed income sent high-grade bonds
rallying. U.S. yields - which move inversely to the price -
plunged, with the benchmark 10-year note yield hitting a record
low of 1.145%.
"The market is pricing in a rate cut by March and three rate
cuts this year, which is a huge turnaround from the start of the
year. But the fact that it looks like coronavirus has a long way
to go means this is not surprising," said Chris Scicluna, head
of economic research at Daiwa Capital Markets in London.
Benchmark 10-year notes US10YT=RR last rose 1-9/32 in
price to yield 1.165%, from 1.299% late Thursday. The 30-year
bond US30YT=RR last rose 2-24/32 in price to yield 1.6701%,
from 1.783%.
Oil prices slumped again and were set for their steepest
weekly fall in years on fears of drooping demand.
U.S. crude CLc1 fell 5.27% to $44.61 per barrel and Brent
LCOc1 was last at $50.47, down 3.28% on the day.
Spot gold XAU= dropped 3.3% to $1,587.91 an ounce after
touching a 7-year high on Thursday. Copper CMCU3 lost 0.05% to
$5,613.00 a tonne. Three-month aluminum on the London Metal
Exchange CMAL3 rose 0.09% to $1,691.50 a tonne.
Coronavirus crashes global markets https://tmsnrt.rs/3cgbhXn
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
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