NEW YORK: World equity markets began the new quarter with steep losses on Wednesday as evidence mounted that the coronavirus pandemic was sending the global economy into a deep recession.

Traders headed for the safety of government bonds, the dollar and gold following sharp slowdowns in manufacturing activity in Japan and Germany, one day after data showed US consumer confidence fell to 3-year lows. New orders for US-made goods fell to an 11-year low and private payrolls fell for the first time since 2017.

MSCI’s gauge of stocks across the globe sank 3.09 per cent following a 4.5pc drop in Tokyo’s Nikkei and broad declines in Europe.

On Wall Street, major benchmarks were sharply lower after President Donald Trump warned late Tuesday that maintaining social distancing guidelines for the next 30 days would be a “matter of life and death.”

In midday trading, the Dow Jones Industrial Average fell 687.61 points, or 3.14pc, to 21,229.55, the S&P 500 lost 88.05 points, or 3.41pc, to 2,496.54 and the Nasdaq Composite dropped 208.13 points, or 2.7pc, to 7,491.97.

Commodity markets were much rougher. Brent crude fell more than 5pc to approximately $25 per barrel as the United States, Russia, and Saudi Arabia jostled over a massive oversupply of oil.

Crude oil benchmarks ended the first quarter with their biggest losses in history. Both US and Brent futures got hammered throughout March by the pandemic and a Saudi-Russia price war.

Global demand has been cut sharply by travel restrictions. Forecasters at major merchants and banks see demand slumping by 20pc to 30pc in April, and for weak consumption to linger for months.

Published in Dawn, April 2nd, 2020