Policymakers ramp up support as coronavirus fears shred markets

Governments and central banks readied more emergency measures to tackle the economic impacts of the coronavirus on Friday as Asian markets suffered their worst weekly crashes since the 2008 financial crisis.

Canadian Prime Minister Justin Trudeau’s wife, Sophie, was among several thousand people newly diagnosed with the COVID-19 respiratory disease that has now infected almost 135 000 and killed more than 4 900 worldwide.

Experts warn that due to a lack of testing and unreported cases, many more people may be affected by the outbreak that emerged in the Chinese city of Wuhan late last year.

Major sporting events have been cancelled or postponed, large public gatherings restricted or banned and schools closed.

“There is a sense of fear and panic,” said James Tao, an analyst at stockbroker Commsec in Sydney, where phones at the high-value client desk rang non-stop.

“It’s one of those situations where there is so much uncertainty that no-one quite knows how to respond … if it’s fight or flight, many people are choosing flight at the moment.”

Japan’s Nikkei was in freefall, dropping 10% after Wall Street stocks slumped about 10% on Thursday, their worst day since the 1987 “Black Monday” crash.

Travellers in Europe rushed to board flights to the United States after US President Donald Trump imposed sweeping restrictions on travel from the continent, a decision that angered European leaders and frightened investors.

Trump also suggested the 2020 Olympics in Tokyo could be delayed by a year.

“Maybe they postpone it for a year … if that’s possible,” Trump told reporters. “I like that better than I like having empty stadiums all over the place.”

Tokyo 2020 organisers insisted they were moving ahead with preparations to hold “safe and secure” Games on schedule, starting in July.

Still, Japan must take “bold and unprecedented” steps to beat the economic impact of the virus, its economy minister said, suggesting large-scale fiscal stimulus was in the works.

US lawmakers and the White House neared agreement on a coronavirus economic aid package, with House Speaker Nancy Pelosi saying she hoped to announce a deal on Friday.

The US Federal Reserve on Thursday offered a hefty $1.5 trillion in short-term loans to stimulate the economy and stabilise the financial system.

Australia’s central bank followed suit, pumping an usually large amount of cash into the system on Friday as panic selling across global markets threatened to drain liquidity and push up borrowing costs.

Losing loved ones

The outbreak has disrupted industry, travel, entertainment and sports worldwide, and prompted airlines to appeal for urgent aid from their governments.

European leaders warned things would get worse before they get better.

“It’s going to spread further,” British Prime Boris Johnson told a news conference. “I must level with you, level with the British public – more families, many more families, are going to lose loved ones before their time.”

French President Emmanuel Macron said in a television address the country was facing its worst public health crisis in a century and announced measures including the closure of all schools, creches and universities from Monday.

In Italy, where the death toll passed 1 000 in Europe’s deadliest outbreak, the government imposed a blanket closure of restaurants, bars and almost all shops except food stores and pharmacies.

By contrast, South Korea – where an outbreak surged at around the same time as Italy’s – reported the number of people recovering from the virus outpaced new infections for the first time, raising hopes that Asia’s biggest epidemic outside China may be slowing.

South Korea has aggressively tested hundreds of thousands of people for infections and tracked possible carriers with cell phone and satellite technology, whereas Italy has tried to curb the movements of its entire population of 60 million people.

Several Latin American countries stepped up measures to slow the spread of the virus, halting European flights, banning public gatherings and closing schools.

Some matches in European soccer’s elite Champions League were postponed, the Australian Grand Prix was cancelled, and in North America, the National Basketball Association and National Hockey League seasons were suspended and Major League Baseball delayed its season.

Australia’s prime minister, Scott Morrison, advised against gatherings of 500 people or more but not for schools, universities, public transport or airports. He said he was going to a rugby match on the weekend.

Small island states in the Pacific, ill-equipped to deal with an outbreak, imposed strict lock-down measures including denying access to supply vessels and prohibiting human-to-human contact during aircraft refuelling.

But the spread of the virus at its epicentre in China’s Hubei province has slowed markedly amid strict transport curbs on movement and lockdowns.

Just five new cases were reported in the provincial capital of Wuhan on Friday while no locally transmitted infections were reported in the rest of the country.

The China Daily intensified a war of word with the United States, denouncing US “China-bashers” and hailing China as an example for its pandemic controls and international cooperation.

A Chinese foreign ministry spokesman on Thursday suggested the US military might have brought the coronavirus to Wuhan.