SYDNEY (Reuters) – Asian shares sank in a sea of red on Monday as panicked investors ran away to bonds to hedge the economic shock of the coronavirus, and oil plunged more than 20?ter Saudi Arabia slashed its official market price.
FILE PICTURE: A guy wearing a protective face mask, following a break out of the coronavirus, talks on his cellphone in front of a screen revealing the Nikkei index outside a brokerage in Tokyo, Japan, February 26,2020 REUTERS/Athit Perawongmetha
The world’s leading oil exporter prepares to raise its production substantially after the collapse of OPEC’s supply cut arrangement with Russia, a grab for market share reminiscent of a drive in 2014 that slashed rates by about 2 thirds.[O/R]
Brent unrefined LCOc1 futures slid $9.39 to $3588 a barrel in chaotic trade, while U.S. unrefined CLc1 shed $8.77 to $3251
The safe-haven yen rose versus emerging market currencies with direct exposure to oil, including the Russian rouble and Mexican peso, as analysts saw risk ahead.
” Today’s cost action jeopardizes the fiscal health of the huge majority of sovereign manufacturers and budget cuts and increased financial obligation loads are now looming in the event of a prolonged period of low prices,” warned Helima Croft, head of worldwide product strategy at RBC Capital Markets.
” For the most politically and economically vulnerable manufacturer states, the numeration might be serious.”
There were likewise worries that U.S. oil producers that had issued a lot of financial obligation would be made uneconomic by the cost drop.
Energy stocks took a whipping and E-Mini futures for the S&P 500 ESc1 tumbl