International stock markets are on the brink. In the wake of the financial centers in Asia, the stock markets in Europe lose between 6 and 8% in the morning. The CAC 40 had lost almost 7% to 4,793 points at midday.
The alarmist signals of the repercussions of the coronavirus crisis on the world economies are causing a wind of panic in the international financial centers.
In Paris, the CAC 40 has dropped below 4,800 points, its lowest level since the end of 2018. The same has been observed elsewhere in Europe. In Frankfurt, the Dax fell 6.49%, in Italy, the Milan Stock Exchange collapsed by more than 8%.
Earlier, the main stock exchanges in Asia had suffered heavy losses like Tokyo with a fall of 6.15%. The Chinese stock markets also started a strong decline, especially that of Hong Kong where the Hang Seng index lost 3.87% from the first trade. Shanghai declined by 1.56% and Shenzhen by 1.66% at the opening…
Disaster streaks
The markets, which were already feverish due to the coronavirus, saw a new parameter come into line since with the collapse of the oil price of 26% after the failure of the meeting of OPEC and Russia.
Bruno Le Maire, the Minister of the Economy, expects that "the impact of the coronavirus crisis will be severe on French growth" with a drop of several tenths of a point of GDP. The Banque de France lowers its forecast for growth in the French economy in the first quarter to 0.1%, against 0.3%.
. @ BrunoLeMaire: "The impact of the coronavirus crisis will be severe on French growth in 2020. It will be in the region of several tenths of points of GDP." # le79Inter pic.twitter.com/4ap22qJKxm
- France Inter (@franceinter) March 9, 2020According to the monthly business survey conducted by the Banque de France with business leaders, they now anticipate a decline in activity in March in both industry and services. Whole sections are affected, such as tourism, catering, trade fairs, air travel, etc.
Japan could enter recession
“The risks of a global recession have increased. A prolonged decline in consumption, in addition to prolonged closings of companies, would attack profits, lead to job losses and weigh on the morale of economic players "say Moody's analysts.
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Germany, a major exporter, has announced support measures to try to limit the damage. As for Japan, the country could enter into recession after the contraction of its GDP for two quarters.
Beyond the indices, all the values of the CAC 40 index are strongly affected. Unsurprisingly, Total won more than 10%, as did oil companies like Technip by 15%.
Banks are also heckled because of the sharp drop in US rates and the risk of a drying up of financing in the real economy. BNP lost more than 8%, just like Crédit Agricole. For its part, the Société Générale won more than 11%.
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