The stock market’s fall comes after huge losses on Asian markets on Monday, where fears about the worsening worldwide economic slowdown were exacerbated by the shock decision by Saudi Arabia over the weekend to increase oil production in an attempt to drive competitors such as Russia and the US out of the market. The price of Brent crude oil fell nearly 30% to $31.14 on Monday, its biggest single fall since the start of the first Gulf war in 1991. Some experts predict it could fall even further unless the Saudis and Russians return to the bargaining table.
The turmoil in the international markets came as the outbreak continued to deepen around the world and bring more restrictions on movements from governments:
Italy was plunged into chaos as the number of fatalities increased by more than 50% to 366 and the government plans to lock down large parts of the country’s north, 25% of the population, were leaked to the media. The stranded cruise ship Grand Princess was expected to finally dock in Oakland, California on Monday as arrangements were made for its 3,500 crew and passengers, some of whom have contracted the virus. The number of deaths in the US rose to 21 with more than 550 confirmed cases.
Saudi Arabia cordoned off the oil-rich, predominantly Shia region of Qatif, suspended air and sea travel to nine countries and closed schools and universities as the number of cases in the kingdom continued to increase. Organisers of the Australian Grand Prix, set to kick off the Formula One season in Melbourne on Sunday, said there was “no chance” the race would be called off despite rising concerns about the event’s large crowds facilitating the spread of the disease.
As concern grew over a possible recession in Australia as a result of the virus, a wave of selling on stock markets in Asia Pacific was the worst since the collapse of Lehman Brothers in 2008 heralded the onset of the global financial crisis. The Australian share market closed down 7.33% as energy companies saw double-digit losses. The Nikkei in Japan was down 5% while shares in Hong Kong were off 3.5%.