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Global stock markets lose $ 5 trillion in collapse due to coronavirus

UNITED STATES (OBSERVATORY NEWS) — The coronavirus panic has once again brought down global stock markets, the worst week since the 2008 global financial crisis. Losses in value terms reached $ 5 trillion, write Reuters.

The rapidly spreading outbreak of the coronavirus COVID-19 posed a threat to the global economy and shocked global markets.

According to Moody’s Analytics, the likelihood that the outbreak will develop into a pandemic has doubled – from 20% to 40%.

Investors’ risk aversion and increased demand for defensive assets pushed US government bond yields to new record lows.

The main European markets fell by 2-3% at the beginning of trading and continue to decline.

The MSCI All Country World, which tracks stocks in nearly 50 countries, fell more than 1% after trading in Europe and nearly 10% per week – this is the worst performance since October 2008.

US stocks only dropped 4.4% on Thursday, the largest decline since August 2011. Shares have lost 12% since reaching a record high just nine days ago.

The CBOE Volatility Index, often referred to as the “fear index”, jumped to 39.16 points, reaching its highest level in about two years.

Japanese Nikkei 225 completed trading on Friday with a decrease of 3.67%. The Chinese Shanghai Composite index at the close of trading lost 3.71%.

South Korean KOSPI fell 3.3%, the Australian S & P / ASX 200 fell 3.25%.

Markets are betting that the US Federal Reserve will cut interest rates as early as next month, while other leading central banks will follow suit to support the economy amid a virus outbreak.

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