Markets plummeted again on Monday as coronavirus infections passed the 110,000 mark, making the prospect of a global recession “almost inevitable”, it has been claimed.
Share prices had already been in a fragile state over fears of how badly the coronavirus would affect global growth but sunk even further after oil saw its sharpest one-day drop since the 1991 Gulf War.
According to Nigel Green, chief executive of financial advisory group deVere, the 27% fall in oil prices has “further fuelled the sell-off in global stock markets”.
“Every major stock market is getting hammered as oil prices plunge due to a price war following the breakdown of Saudi Arabia’s oil-cutting alliance with Russia over the weekend,” he said.
“With the combination of the implications of the oil stand-off and the [coronavirus] outbreak, I now believe that it’s almost inevitable that there will be a global recession this year,” he added.
For Invesco fund manager Georgina Taylor, ongoing volatility caused by the coronavirus is keeping short-term risk management in focus.
“The tough assessment right now is whether economic deterioration is very short lived or whether it persists because of the virus now sitting alongside other broader economic pressures, which had been increasing anyway,” she said.
Equity funds were hit especially hard during the last week of February, as investors rushed to pull out cash amidst ongoing news of the economic impact of the coronavirus, according to data from funds transaction network Calastone.
This came after a relatively positive January which saw UK savers invest £4.2 billion before news of the coronavirus struck.
But for Dr Kerstin Braun, president of Stenn Group, an international provider of trade finance, signs of a global recession are already beginning to play out just three months into 2020.
“Markets have been shaken by the threat of a price war between Opec and its main ally, Russia,” she said.
“With markets fluctuating like crazy as the coronavirus takes its financial toll on global economies, and oil prices at unpredictable lows, for us this marks the beginning of a recession,” she added.
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