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Global Stocks Enter Bear Market After U.S. Bans European Visits

Global Stocks Slump, Enter Bear Market on Spreading Virus Woes

(Bloomberg) -- The stock market’s latest plunge pulled global equities into a bear market with traders taking fright at the potential economic damage of the coronavirus and President Donald Trump stopping short of offering a detailed U.S. rescue package.

The MSCI All-Country World Index fell as much as 2.3%, the lowest intraday level since January 2019. The gauge is 20% below its record closing high of Feb. 12. The sell-off has wiped out over $11 trillion in the index’s capitalization.

Global Stocks Enter Bear Market After U.S. Bans European Visits

European equities followed Asian stocks lower as investors fled risk assets amid concerns about the cost to earnings and global growth from the spreading coronavirus. The U.S. has restricted travel from Europe, and underwhelming stimulus measures disappointed investors.

“There is no place to hide aside from cash,” said Alberto Tocchio, chief investment officer at Colombo Wealth SA in Lugano, Switzerland. “Meltdown phase is continuing with an exceptional strong selling pace. What seems to be very clear is that if this virus continues to spread and containment measures are prolonged and extend further, that’s clearly going to have more of an impact on global growth and earnings.”

Investors are looking for concrete and significant stimulus measures that could limit the fallout from the coronavirus. So far, markets have brushed off interest rate cuts from the U.S. Federal Reserve and Bank of England.

Fast and Brutal

“The sell-off is fast and brutal,” said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co. “WHO declared a global pandemic and on fiscal measures, Trump did not add much -- investors were clearly disappointed.”

Energy shares have been the worst-hit globally since the Feb. 12 record high following the eruption of a price war and the collapse of crude. The MSCI ACWI Finance and Materials indexes are the next worst.

Berenberg is avoiding energy, basic materials and banking sectors, while preferring quality growth stocks.

The pandemic has pushed government’s in Europe to come out with fiscal aid packages. Italian Prime Minister Giuseppe Conte’s administration is ready to spend as much as 25 billion euros ($28.3 billion) on stimulus measures and the U.K. on Wednesday announced total fiscal stimulus of 30 billion pounds ($39 billion).

Here are other indexes that entered a bear market this week:

Asia Pacific Region:

Australia’s S&P/ASX 200

Japan’s Topix

Jakarta Composite

Singapore Straits Times

Philippines Stock Exchange PSEi

India’s S&P BSE Sensex

Europe:

Stoxx Europe 600

Euro Stoxx 50

Italy’s FTSE MIB

U.K.’s FTSE 100

Germany’s DAX Index

Spain’s IBEX 35

Oslo Stock Exchange Benchmark Index

OMX Helsinki 25 Index

Americas:

Dow Jones Industrial Average

Russell 2000

The S&P/Toronto Stock Exchange Composite

Brazil’s Ibovespa

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Paul Jarvis, Jon Menon

©2020 Bloomberg L.P.