UKX FTSE 100 Index

By Joanne Chiu and Anna Isaac 

The rapid spread of coronavirus cases and Washington's delay over an economic rescue package rattled markets early Monday, sending U.S. stock futures, global stocks and oil prices lower.

S&P 500 futures fell 2.6%, after briefly hitting the maximum 5% loss allowed in a single session. That suggested U.S. shares would face further pressure Monday. Last week, the Dow Jones Industrial Average and S&P 500 indexes registered their worst weeks since October 2008.

"The futures market is really getting hit on the fact that the stimulus and fiscal relief package was falling foul of the political impasse in the Senate," said Andy Maynard, managing director of equities sales and trading at China Renaissance Securities.

U.S. lawmakers and administration officials had hoped to reach an agreement on a $1.3 trillion deal so both chambers of Congress could approve it Monday. But the package hit a procedural roadblock in the Senate Sunday, a sign of political discord amid a national emergency.

Mr. Maynard said this added to concerns stoked by rising infection figures, statewide restrictions on activity, and expectations for rising U.S. unemployment.

European markets traded lower. The Stoxx Europe 600 pan-continental index fell 3.8%, and the German Dax dropped 3.7%. German Chancellor Angela Merkel is self-isolating after coming into contact with an infected doctor. The government is set to adopt fiscal measures worth EUR500 billion ($535 billion) to help cushion Europe's economic powerhouse from the impact of the pandemic. The U.K.'s benchmark FTSE 100 fell 3.7% to nearly its lowest point in a decade.

While stocks were getting hammered, investors sought shelter in traditional safe-haven assets, such as bonds, gold and currencies like the Swiss franc and Japanese yen, a return to a more traditional trading pattern that gave some investors solace. For several days last week, those assets fell along with stocks, a sign that markets were coming under severe strain.

"We're not at a turning point yet, we're still seeing a crisis in markets. But, there are signs that some of the stress may be easing," said Lee Hardman, currency analyst at MUFG Bank. He pointed to efforts central banks, including the Federal Reserve, made last week to calm markets.

The yield on the 10-year U.S. Treasury note fell 0.125 percentage point to 0.813%, according to Tradeweb, as investors sought the safety of government bonds. Yields move in the opposite direction to prices.

The world's biggest companies took action to withstand prolonged disruption from the coronavirus crisis. Royal Dutch Shell PLC said Monday that it was cutting costs to reinforce its financial position amid the continuing impact on its operations, and on oil prices.

Power generator Aggreko PLC and aircraft maker Airbus SE withdrew their investor guidance to calibrate the impact of coronavirus on demand. Airbus withdrew its dividend proposal and boosted its credit facility by EUR10 billion ($10.7 billion).

In the U.K., the Financial Conduct Authority pushed companies over the weekend not to make hasty updates to investors, noting the fast-moving impact of the coronavirus on the economy and on the capabilities of companies and auditors.

"The practice of issuing preliminary financial statements in advance of the full audited financial statements is adding unnecessarily to the pressure on companies and the audit profession at this moment," the chief market regulating body said.

Brent crude oil fell 4.5% to $25.77 a barrel. That put the global oil benchmark close to the $24.88 level it hit Wednesday, which was the lowest since May 2003. Crude prices have plunged on worries about reduced demand and a price war among major oil producers.

In Asia-Pacific, most stock benchmarks dropped. Australia's benchmark S&P/ASX 200 fell nearly 6% to levels last reached in 2012, despite the country's federal government rolling out a stimulus package of 66 billion Australian dollars ($38 billion). Indian shares plunged, triggering trading halts, with the S&P BSE Sensex index falling nearly 13%.

Japan's Nikkei 225 bucked the downtrend, ending 2% higher. It had been closed Friday, when some other Asian markets had rallied. Shares in SoftBank Group, a major index constituent, soared on plans to sell up to Yen4.5 trillion ($41 billion) of assets to buy back shares and redeem debt.

Write to Joanne Chiu at joanne.chiu@wsj.com and Anna Isaac at anna.isaac@wsj.com

(END) Dow Jones Newswires

March 23, 2020 08:11 ET (12:11 GMT)

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