LONDON (Reuters) – How much damage has the coronavirus and the oil price collapse inflicted on global financial markets this year? Put simply, it has probably been the most destructive sell-off since the Great Depression.
FILE PHOTO: An empty street is seen near Wall street during the outbreak of the coronavirus disease (COVID-19) in Manhattan, New York City, U.S., March 27, 2020. REUTERS/Jeenah Moon
The numbers have been staggering. $12 trillion has been wiped of world stock markets .MIWD00000PUS, oil has slumped 60% as Saudi Arabia and Russia have started a price war and emerging markets like Brazil, Mexico and South Africa have seen their currencies plummet more than 20%.
Volatility and corporate borrowing market stress has spiked on worries that whole sectors could go bust, airlines .dMIWO0AL00PUS have had half their value vaporized, while cratering economies risk a new wave of government debt crises.
“It has been like a train wreck,” Chris Dyer, Director of Global Equity at Eaton Vance, said. “You could see it coming and coming and coming, but you just couldn’t stop it happening.”
That carnage has seen 22% and 20% slumps for Wall Street’s Dow Jones .DJI and S&P 500 .SPX, over 23% for MSCI 49-country world index .MIWD00000PUS and 26% for London’s internationally exposed FTSE .FTSE.
For reference, the record quarterly drop for Wall Street was 40% in 1932 in the midst of the Great Depression. The fact that the S&P and Dow were at record highs back in mid February has made the crash this time seem more brutal.
GRAPHIC: World stocks vs. COVID-19 confirmed cases – here
Stocks in China, where the virus hit first, have faired relatively well in comparison with only an 11% drop in dollar terms .CSI300, but the impact on other major emerging markets has