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Equities in the United States were down heavily overnight – reflecting fears among investors that the measures taken by US Federal Reserve may not be enough to prevent a coronavirus-induced recession.
The S&P 500 index tumbled by 324.89 points or 12% on Monday to close at 2,386 – its biggest one-day fall since 1987 and its third consecutive day of swings of more than 9%, while the Dow Jones Industrial Average closed down by 2,997.10 points or 12.9% at 20,188.52.
The weakness was not confined to the US, however, with the pan-European Stoxx 600 benchmark falling by 4.9% on Monday and Australia’s benchmark ASX200 index plunging by 9.7%.
“Drastic measures by the Fed and other central banks have failed to appease markets with investors still running towards the exit door of risk assets as governments step up their radical measures to contain the [novel coronavirus (2019-nCOV)] outbreak,” Rodrigo Catril, currency strategist at the National Australia Bank, said on Tuesday.
Amid this heightened risk aversion, the SHFE base metals were largely under pressure on Tuesday morning. Lead was the worst performer of its peers, with its most-traded May contract dropping to 13,940 yuan ($1,993) per tonne at the close of the morning session, down by 245 yuan per tonne or 1.7% from Monday’s close of 14,185 yuan per tonne.
This was closely followed by a 1.5% drop in June tin to 125,240 yuan per tonne, while May copper dropped by 0.4% to 42,470 yuan per tonne and May aluminium was down by 0.6% at 12,740 yuan per tonne.
In terms of gains, May zinc rose by 0.7% to 15,650 yuan per tonne and June nickel was up by 0.4% at 99,780 yuan per tonne. Other highlights