On Sunday, the U.S. Federal Reserve made the decision to cut its target interest rate to zero. However, this decision was not enough to improve the market sentiment, as stock markets are back in panic.
Stock markets across the Asia Pacific region declined on Monday. The S&P/ASX 200 in Australia suffered as the subindex fell 9.7% to close at 5,002. Moreover, that was its largest ever daily drop.
Interestingly, at one point, the financial subindex dropped as much as 11.1% as shares of the major banks declined. For example, shares of Australia and New Zealand Banking Group dropped 12.5%. Moreover, shares of Commonwealth Bank of Australia fell 10.01%. At the same time, shares of Westpac declined 11.81%.
Also, shares of National Australia Bank fell 12.44%.
Unfortunately, mainland Chinese stocks dropped on the day as well. The Shanghai Composite fell 3.4% lower at about 2,789.25. Meantime, the Shenzhen composite dropped 4.834% to approximately 1,712.02. Moreover, the Shenzhen component fell 5.34% to 10,253.28.
In Hong Kong, the Hang Seng index dropped 4.38% as of its final hour of trading.
In Japan, the Nikkei 225 fell 2.46% lower at 17, 002.04. Furthermore, the Topix index dropped 2.01% lower to end its trading day at 1,236.34.
South Korea’s Kospi index slipped 3.19% to close at 1,714.86.
Stock markets and main factors
Investors are closely monitoring the situation. The new Federal Reserve funds rate, used as a benchmark both for short-term lending for financial institutions. The rate will now be targeted at 0%-0.2% down from a target range of 1% to 1.25%.
Coronavirus created too many problems for the stocks. It won’t be easy to overcome all the issues connected with the epidemic. In this situation, investors should be careful when it comes to investing in various companies as situation might change at any time.
However, this decision was not enough to support the stock markets.