The Australian share market suddenly drops 7 percent after US President Donald J. Trump announced a travel ban. He issued a travel suspension for those coming from 26 European countries beginning March 13, at midnight Washington time. It is around 3 PM on Friday, March 13, in Australia.
The travel ban does not include travels coming from the UK. Therefore, all trips from Scotland, England, Wales, and Northern Ireland will still be the usual.
Moreover, the travel suspension will not affect individuals with immediate family members as US citizens and those with legal permanent resident status.
The ban will suspend travels from coming from the continent to the US for 30 days. Countries included in the travel suspension are France, Italy, Germany, Austria, Denmark, Greece, Hungary, Lithuania, Iceland, Poland, Czech Republic, Slovenia, Slovakia, Sweden, and Spain.
As a result, the global stock markets all went into mass hysteria.
During lunchtime trade, Australia’s S&P/ASX 200 falls 4.92 percent. It represents over $50 billion in losses, wiped out in only a matter of minutes.
In the United States, the US Stock Futures fell more than 2 percent. Furthermore, the Dow (INDU) futures dived 1,100 points down with SPX 500 and Nasdaq (COMP) futures dropping at 3.67 percent and 3.92 percent, respectively.
The Asian market is also not exempt as South Korea, and Japan suffered losses at around 3 percent.
In the Netherlands, the market went down to 8.86 percent. While in Germany, it went down by 15 percent. The United Kingdom, while not included in the ban, has closed down at 1.4 percent.
In Australia, the ASX 200 nosedived over 405 points, leading to a 7 percent loss at exactly 13:00 AEDT.
The Australian share market is currently at its lowest in 4 years, with $100 billion in excess wiped off today.
James Tao, CommSec’s Media and Capital Market Analyst, said investors were expecting for Trump to announce his government’s stimulus package. Instead, they were shocked to hear his announcement on the travel ban.
On Thursday, the market crisis smashed stocks in materials, consumer discretionary, healthcare, and energy. Furthermore, panic selling across industries erupted in a frenzy, causing a sharp decline in stock shares.
At midday, BHP and Woodside lost 54 cents and 96 cents, bringing down their stocks to $20.46 and $27.56, respectively. However, BlueScope Steel rose 9 cents, closing at around $10.28.
Woolworths also gained 38.5 cents to $36.43 by 12:10 AEDT, to be exact. Comparatively, Coles dropped by 9 cents or 0.59 percent at $15.18.
Gold prices also fell after investors sold stocks to cover losses after the coronavirus shook the market this week. Newcrest, by 12:10 AEDT, fell 6.2 percent or $1.65 to $24.98. While Northern Star plummeted to $12.405 after losing 4.5 percent or 58.5 cents during lunchtime trade.
In the Australian share market, the AUD versus USD exchange rate declined from the 65.05 cents on Wednesday to 64.60 cents by 13:10 AEDT, Thursday. Despite the trillions lost almost instantly after the announcement, Donald Trump declared his decision to be “a strong but necessary action.”