Asian shares plunge after coronavirus declared pandemic, indexes sink on Wall Street

Asian shares plunged Thursday after the World Health Organization declared a coronavirus pandemic and indexes sank on Wall Street.

Japan’s benchmark Nikkei 225 dived 4.9% to 18,468.99. Australia’s S&P/ASX 200 dropped 6.6% to 5,348.60. South Korea’s Kospi dipped 4.7% to 1,815.98. Hong Kong’s Hang Seng lost 3.8% to 24,269.06, while the Shanghai Composite index shed 1.3% to 2,928.80.

Thailand’s benchmark plunged 8%.

“Even though we do have substantial support coming through from governments and central banks alike, the dispersion of the virus so far continues to mark the risks of dragging the global economy into recession,” said Jingyi Pan, an analyst at IG in Singapore.

On Wall Street, the Dow’s loss dragged it 20% below the record set last month and put the index in a bear market. The broader S&P 500, which professional investors watch more closely, is a single percentage point away from falling into its own bear market, which would end the longest bull market in Wall Street history.

The decline has been one of the swiftest sell-offs of this magnitude. The fastest the S&P 500 has ever fallen from a record into a bear market was over 55 days in 1987.

Vicious swings like Wednesday’s session are becoming routine as investors rush to sell amid uncertainty about how badly the outbreak will hit the economy. The day’s loss of 1,464.90 points wiped out a 1,167-point gain for the Dow from Tuesday and stands as the index’s second-largest point drop, trailing only Monday’s plunge of 2,013.

The S&P 500 plunged 4.9% to 2,741.38, while the Nasdaq gave up 4.7% to 7952.05.

With Wall Street already on edge about the economic damage from the virus, stocks dove even lower Wednesday after the World Health Organization cited “alarming levels of inaction” by governments in corralling the virus when it made its pandemic declaration.

Investors are calling for coordinated action from governments and central banks to stem the threat to the economy from the virus. Doubts are rising about the U.S. response even after President Donald Trump announced European travel restrictions and Congress unveiled a multibillion-dollar aid package the House could vote on Thursday.

Investors know that lower interest rates or government spending programs alone will not solve the crisis. Only the containment of the virus can do that. But such measures could help support the economy in the meantime, and investors fear things would be much worse without them.

“The government probably should have been thinking about stimulus last month,” said Kristina Hooper, Invesco’s chief global market strategist. “Every day that passes makes the economic impact of coronavirus that much worse.”

Many investors are worried that a divided Congress will have trouble agreeing to any plan, she said.