The Dow Jones Industrial Average plunged nearly 1,000 points on Monday morning as international health officials warned the deadly coronavirus could possibly cause a global pandemic amid a rise of new cases in multiple countries.
The Dow, a stock market performance indicator which tracks 30 large publicly-owned companies, fell nearly 997 points by the opening bell on Monday — a 3.4 per cent drop. Meanwhile, the S&P 500 also plunged 3.1 per cent, and the Nasdaq lost a reported 3.9 per cent.
The stock market losses were the result of growing concerns about the Wuhan coronavirus that has killed an estimated 2,592 people and infected a total of 77,150, according to analysts. While the vast majority of those confirmed cases have been discovered in China, it was reported during the weekend that a surge of new cases have emerged in South Korea and Italy.
Europe was bracing for the potential arrival of the mysterious coronavirus, believed to have originated in a market in Wuhan, China, as Italy recorded its fifth death related to the virus and at least 200 confirmed cases. Officials could not immediately confirm how the coronavirus managed to spread across the hardest-hit country in Europe.
In South Korea, the virus was responsible for at least eight deaths as the country confirmed over 800 cases.
The number of coronavirus cases also spiked in Iran, with at least 12 deaths and 47 confirmed cases in the country.
The Dow was expected to drop by at least 800 points on Monday as new cases of the coronavirus were reported around the world, though some analysts said the plunge also had to do with other factors impacting the global economy.
Nigel Green, CEO of deVere Group, told NBC News: “Coronavirus has struck at a time when major economies, including Japan, Germany, India and Hong Kong are facing a downturn due to other factors such as the U.S.-China trade dispute and political protesters, which could hit the world economy.”
Until recently, the spread of the coronavirus had little impact on the global stock market. But with countries like Japan and Germany facing possible recessions, and an increasing number of international companies warning they would be unable to fulfill demands due to disruptions resulting from the coronavirus outbreak, the effects were finally seen on Monday morning.
However, the number of newly-reported coronavirus cases in China were continuing to fall as the country’s National Health Commission confirmed 409 new cases on Monday, down from 648 new cases reported the day prior.
But the rise of new cases sent “shivers across financial markets” by Monday, according to Raffi Boyadijan, senior investment analyst at XM.
The analyst told MarketWatch “investors were forced to reassess their view that the impact of the outbreak will likely be short-lived”.
