Coronavirus: Stock markets dip by 5% after Trump suspends travel between US, Europe

American stock markets declined by nearly five per cent on Wednesday evening (local time) after President Donald Trump announced that travel from Europe to the United States will be suspended for 30 days, beginning Friday at midnight.

Dow (INDU) futures plunged more than 1,100 points or 4.73 per cent, S & P 500 (SPX) futures fell 4.6 per cent and Nasdaq (COMP) futures were down 5 per cent, CNN reported.

The suspension does not include the United Kingdom. Trump made the announcement during an address to the nation about the novel coronavirus outbreak, which has surpassed 115,000 cases worldwide. More than 4,000 people have died.

He later clarified on Twitter that "trade will in no way be affected" by the travel restriction.

"Hoping to get the payroll tax cut approved by both Republicans and Democrats, and please remember, very important for all countries and businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe. The restriction stops people not goods," the President tweeted.

Markets in Asia were all trading sharply lower Thursday morning. Japan's Nikkei 225 (N225) fell 4.1 per cent. The benchmark index is on pace to enter into a bear market, defined as a drop of more than 20 per cent from the most recent high.

Hong Kong's Hang Seng Index (HSI) was down 3.2 per cent, while the Shanghai Composite Index (SHCOMP) fell 1 per cent and South Korea's Kospi Index (KOSPI) was down 3.8 per cent.

The declines followed another volatile day on Wall Street in a roller coaster week for the markets driven by the novel coronavirus outbreak and plummeting oil prices.

Both the S & P 500 and the Dow slipped into a bear market territory, but only the Dow closed the day in a bear market.

Two other key market indexes, the Dow Jones Transportation Average (DJT) and the small-cap focused Russell 2000 (RUT), are already in a bear market.

The World Health Organization has also officially announced the viral infection to be a global pandemic. There are 118,000 cases, more than 4,000 deaths, the agency said, and the virus has found a foothold on every continent except for Antarctica.


(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel