Asian shares and U.S. stock futures fell on Friday following another Wall Street rout as disruptions to global business from the coronavirus beyond China worsened, stoking fears of a prolonged world economic slowdown.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.3%. Australian shares were down 1.64%, while Japan’s Nikkei stock index slid 2.29%.
Yields on 10-year U.S. Treasuries fell to a record low and two-year yields fell to the lowest in more than three years as investors increased bets that the Federal Reserve will follow this week’s surprise 50 basis point rate cut with further easing to prevent corporate bond spreads from widening further.
Oil prices fell due to worries that non-OPEC oil producers might not agree to output cuts even though global energy demand is weakening.
The spread of a new coronavirus has accelerated so much in Europe, Britain and North America that investors who once played down the virus are now re-assessing the risks, which means more volatility in financial markets.
U.S. stock futures erased early gains to trade down 0.12% in Asia on Friday.
Officials and companies in Britain, France, Italy, and the United States are struggling to deal with a steady rise in coronavirus infections that have in some cases triggered corporate defaults, office evacuations, and panic buying of daily necessities.
The flu-like virus emerged late last year in the central Chinese city of Wuhan and has since spread to more than 80 countries and has claimed more than 3,000 lives. New infections have slowed in China, but there are concerns other countries are not prepared.
Shares in China fell 0.96%, while stocks in Hong Kong, another city hard hit by the virus, fell 1.89%.
Travel restrictions and factory closings aimed at curbing the spread of the virus are expected to put downward pressure on global economic growth.
Many investors await the release of U.S. non-farm payrolls later on Friday. Recent U.S. economic data has been encouraging, but concerns about the epidemic are likely to overshadow any signs of a strong labour market.