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Coronavirus: Global markets fall amid pessimism over response measures

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Traders work on the floor of the New York Stock Exchange, March 3, 2020.
Traders work on the floor of the New York Stock Exchange, March 3, 2020.   -   Copyright  Richard Drew/Copyright 2019 The Associated Press. All rights reserved
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International stock markets fell again on Friday as fears about the coronavirus outbreak dominated trading.

In Europe, France’s CAC 40 dropped 1.78% in early trading, Germany’s DAX was down 2.1%, while the UK’s FTSE 100 shed 1.4%.

In Asia, sharp drops were registered in Japan, where the Nikkei was down 2.7% at the close. There were similar falls in South Korea, Hong Kong, Australia and elsewhere.

It followed a disappointing closure in the United States, where pessimism over the ability of the US to counter the virus outbreak appeared to prevail, amid doubts over the efficiency of central bank action.

On Wall Street, major indexes lost roughly 3.5%, nearly wiping out the rally from the previous day. This had been prompted by hopes that authorities around the world would move to cushion the economic fallout, in the wake of the Federal Reserve’s emergency rate cut earlier this week.

Several countries responded with rate cuts, although the European Central Bank and the Bank of Japan – despite pledging to support their economies – did not follow suit as they already have interest rates set below zero.

In China, shares have been steadying along with the outbreak. But it’s almost impossible to know the real picture across the vast country.

A lack of confidence in the Chinese authorities’ handling of the situation is also said to be contributing to market pessimism.

“Rumours that China may be lying about the resumption of activity explain why the issue goes beyond governments’ and central bankers’ control this time,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a commentary quoted by AP.

The Chinese government has been gradually urging companies to go back to work, while taking precautions to protect employees. Earlier it shut down most business and ordered millions of people to stay at home in a stringent mass quarantine effort.