COVID-19 Resurgence Hits Global Stock Markets

Dow Jones Index Drops 6.9%
KOSPI Index Starts Down 4%
Asian Markets Also Fall Broadly
Concerns Over Delayed Economic Recovery

On the 12th, global stock markets froze due to concerns over the resurgence of COVID-19, causing the KOSPI index to start with a plunge of over 4%. Dealers are busy working in the Hana Bank dealing room in Euljiro, Seoul. Photo by Moon Honam munonam@

[Asia Economy New York=Correspondents Baek Jong-min, Kwon Jae-hee, Lee Min-woo] The New York stock market experienced a sharp decline. Concerns over the resurgence of the novel coronavirus infection (COVID-19) and the slower-than-expected economic recovery engulfed the market. The drop in the New York stock market also affected financial markets in Asia following Europe.

On the 11th (local time), the Dow Jones Industrial Average fell sharply by 6.90% to close at 25,128.17, the S&P 500 index plunged 5.89% to 3,002.10, and the Nasdaq index retreated from above the 10,000 mark to 9,492.73 in just one day. MarketWatch reported that this was the largest drop in the Dow Jones since the crash in March.

There was strong selling pressure in the market that day. Analysts attributed this to Federal Reserve Chairman Jerome Powell’s remarks during a press conference following the Federal Open Market Committee (FOMC) meeting the previous day, where he expressed uncertainty about the speed of the U.S. economic recovery, stating that “it will be a long road” until recovery. Additionally, news that the number of COVID-19 cases was rising again in many U.S. states that had resumed economic activities dampened investor sentiment. Furthermore, forecasts that the number of COVID-19 deaths in the U.S. could reach 170,000 by October caused the market to collapse.

Although new unemployment claims last week totaled 1.54 million, below initial expectations, Powell’s comments and concerns about COVID-19 were not alleviated. U.S. Treasury Secretary Steven Mnuchin reaffirmed his commitment to continuing economic reopening despite fears of a second wave, stating in an interview that “the U.S. economy cannot be shut down again.” However, experts pointed out that even without widespread lockdowns, localized restrictions in areas with rising new infections could reduce the momentum of economic recovery.

Asian stock markets also fell one after another. The KOSPI opened with a decline of over 4%. However, by 10 a.m., the drop narrowed to 3.44% (74.97 points), closing at 2,101.81. In the Korea Exchange, individuals and institutions were net buyers of 193.9 billion KRW and 5.6 billion KRW respectively, while foreigners were net sellers of 184 billion KRW. The KOSDAQ index opened down 4.51% (34.15 points) at 722.91 and recorded 731.51 as of 10 a.m.

Japan’s Nikkei 225 index traded at 21,958.33 at 10:30 a.m. (Korean time), down 2.29% (514.58 points). The Nikkei opened at 22,032.12, down 1.74% (370.79 points) from the previous day’s close, and soon fell below the 22,000 mark. China’s Shanghai Composite Index started trading at 2,876.8, down 1.51% from the previous day.

This content was produced with the assistance of AI translation services.