A third day of selling has now sliced almost $A130 billion from the value of the ASX 200 and all but wiped out 2020’s gains as fears about the upsurge in cases of COVID-19 outside China continued to escalate.
The falls on Monday, Tuesday and Wednesday means the ASX 200 has had its largest three-day fall since August 2015.
The index slid 158.5 points, or 2.3%, to 6708.1 points, finishing trade near its lows for the session.
That comes after falls of 2.25% on Monday and 1.6% on Tuesday for a total loss of just over 6.1%. That’s most of 2020’s early gains gone – only around 0.43% remains from the solid start-up to Monday of this week.
Combined with fall in the previous two days, the total value of Australia’s top 200 companies has now shed just under $130 billion since the start of the week.
Every sector skidded in more than 1.6%, led by those sectors that led the market rally – technology and healthcare – which both slumped 3.6% for the session.
Materials, energy, consumer staples, communications, financials, industrials, and utilities also shed 2% or more on Wednesday.
There were no defensive sectors.
Asian markets also fell, but the losses were the smallest this week – all less than 1% except for Singapore which slid 1%.
Markets in Europe followed suit with more heavy losses – from 1.44% in Italy to over 2% in Spain where the virus has emerged in the Canary Islands.
The continuing losses reflect a growing realisation by previously blase investors that the coronavirus outbreak has now moved well beyond China’s borders, increasing the potential for a massive crunch for the global economy.
“The coronavirus should never have been dismissed so easily by most and by the market given the high infectivity, the response by the Chinese government, the early assessment by industry experts and the apparent attributes of the virus,” Dr. Jerome Lander, portfolio manager at Lucerne Investment Partners told Fairfax Media.
“The market being imminently cornered was predictable. It is not over yet. Further clustered outbreaks in other countries are likely to strike soon. Many governments are now likely to find containment of the coronavirus impossible.”
Dr. Lander said that despite recent losses in global equity markets, the fallout from the coronavirus is still under-appreciated among investors who continue to put their faith in central banks to limit further declines.