The JSE is plunging amid panic selling, and global markets tanking on coronavirus fears
- The JSE all-share lost 10% of its value by Thursday 4PM, while global stocks and US stock market futures fell by more than 4.5%.
- Much of the drop came after US President Donald Trump announced several steps the US will take as it grapples with the novel coronavirus pandemic.
- Trump said the US will ban all travel from Europe by non-US citizens for thirty days.
- He added that the "prohibitions will not only apply to the tremendous amounts of trade and cargo, but various other things as we get approval. Anything coming from Europe to the United States is what we are discussing," before walking back the comments in a tweet after the speech.
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The JSE's all-share index (Alsi) had lost more than 10% of its value on the day by 4PM on Thursday, amid what appeared to wide-spread panic selling in emerging markets, instruments such as bitcoin, and US stock futures.
The Alsi, a broad measure of the value of the JSE – and business in South Africa – is now at levels not seen since mid-2016.
Meanwhile futures for the three major US indexes were down sharply in after-hours trading in that country, with S&P 500, Nasdaq, and Dow Jones industrial average futures all down roughly 4%.
Futures do not correlate directly with trading during regular hours, but the slides came just hours after the Dow officially fell into bear market territory, meaning the index was down 20% from its recent heights. The move ended the longest bull market run in history for the index, which started on March 9, 2009. The S&P 500 and Nasdaq were just short of entering bear markets.
Global stocks also continued their tumbles with Japan's Nikkei index down more than 4% and the Australian S&P/ASX 200 down more than 6%. China's Shanghai Composite index was looking slightly better, but still off by more than 1%.
Bitcoin fell fell below $6,000 for the first time since May amid a larger global market sell-off as investors panic about the spread of novel coronavirus.
The plunges came after US President Donald Trump announced several steps Amrica will take to respond to the coronavirus pandemic. Trump said the US will ban all travel from Europe by non-US citizens for thirty days.
He added that the "prohibitions will not only apply to the tremendous amounts of trade and cargo, but various other things as we get approval. Anything coming from Europe to the United States is what we are discussing."
But the White House and the president himself scrambled to clarify his comments as futures tanked in response to his announcement.
"Hoping to get the payroll tax cut approved by both Republicans and Democrats, and please remember, very important for all countries & 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," Trump tweeted, contradicting his earlier remarks.
The World Health Organisation officially classified coronavirus, which leads to a disease called COVID-19, as a pandemic on Wednesday. More than 125,000 people have been infected across the globe and there have been more than 4,500 deaths.
Some South African shares – such as Sasol – were particularly hard hit, but analysts said they were seeing wide-spread selling across the board, and also into assets beyond equities, as investors ran for cover.
Those investors apparently did not believe they would find safety in the likes of bitcoin, or in a South Africa, despite the current low level of Sars-COV-2 levels recorded locally to date.
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