Global stock markets, including Egypt, began to trend down on the back of the spread of coronavirus, incurring trillions of dollars in losses since February. The situation is further complicated due to the oil price war between the Organisation of Petroleum Exporting Countries (OPEC) and Russia.
In Egypt, Monday’s morning trading session was suspended for the second day in a row for half an hour due to surpassing the downward percentage of five percent, including suspending trades over 27 companies’ equities for the second time in less than 10 sessions.
Monday's session also witnessed the drop of EGX30 index with 5.47 percent, trading at 11,200 points, the fall of EGX70 with 2.93 percent, trading at 1,107 points, and the decline of EGX100 with 3.51 percent, trading at 1,194 points. Trade value recorded EGP 124 million.
Accordingly, Monday’s trade witnessed a rough drop following its decline for the second consecutive day, albeit in a faster pace, due not only to the coronavirus outbreak, but also because of the oil price war that has been raging between OPEC and Russia.
The situation led to the fall of light oil crude equities by over 21 percent, reaching $32/bbl, which dragged global stocks down, including those of Gulf countries.
Consequently, EGX’s key index lost more than six percent in the first hour of trade.
By mid-Monday, EGX30 continued to decline by 7.83 percent, and the EGX70 declined by 4.75 percent, with a total market value drop worth over EGP 30 billion, to reach EGP 70 billion since the beginning of March.
Globally, stock markets are tanking, affected by the oil price war that caused an unprecedented downward trend in crude prices in almost 30 years along with the threat of the Covid-19.
European stocks dropped in the opening sessions, as London’s FTSE 100 (UKX) declined by 8.5 percent, witnessing its worst day since the global financial crisis of October 2008.
Meanwhile, Germany's DAX (DAX) fell by 7.4 percent, while Italy's benchmark index fell by7.1 percent.
In the Gulf, stock markets performed in red by the beginning of their Monday sessions.
Dubai's stock market witnessed a drop of 8.39 percent, losing AED 20 billion, by the end of Monday’s trade. Real estate, banking, and commodities sectors recorded their worst performance in seven years, while Abu Dhabi's stock market declined by 8.5 percent.
The Saudi stock market plummeted by nine percent, suspending trades over ARAMCO equities, while Bahrain’s stock market continued its retreat by 5.82 percent for the fourth day in a row, Qatar’s fell by 8.7 percent and Kuwait’s dropped by 9.2 percent.
Financial markets expert Mohamed Deshnawy attributed such performance not only to the COVID-19 outbreak but also to the bad situation of the global economy since 2016 with the expectations of a looming global economic recession which pushed great countries to compete to avoid the impact on global gross products.
This competition, according to Deshnawy, has taken place over several laps between the US and China, ending with the spark of the trade war between the two countries.
He added that the oil price war has put pressure on the global stocks' performance, especially with crude oil prices declining by more than 30 percent.
“Stock markets across the globe will remain in red until the threats of Covid-19, trade war, and oil prices are over,” he said.