Shares slide as coronavirus raises recession fears

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A man wearing a face mask walks past a Hang Seng Index Board.

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Share prices in Asia have fallen again this morning as fears grow that the coronavirus could cause a global recession.

It comes after official data showed that Chinese factory activity fell in February at the fastest rate on record.

Last week concerns about the outbreak wiped more than $5 trillion from global stocks.

Investors are now waiting to see whether central banks around the world will intervene to prop up markets.

In morning trading Japan’s benchmark Nikkei 225 stock index was around 1% lower, while Australia’s All Ordinaries index was down almost 3%.

In the US, stock index futures, which are early indicators of how markets may perform in early trading, pointed to a lower open on Wall Street.

On Friday the US Federal Reserve Chairman Jerome Powell said the central bank is watching developments closely for risks to the US economy and promised to take action if necessary.

Data released on Saturday showed that China’s official Purchasing Managers’ Index contracted in February at the fastest rate on record. The fall, which was even worse than slump seen during the 2008 global financial crisis, highlights the outbreak’s huge impact on the world’s second-largest economy.

Over the weekend senior officials in President Donald Trump’s administration also tried to soothe concerns about the risk of recession, highlighting the US economy’s underlying strength.

US Vice President Mike Pence, who is leading the administration’s response to the coronavirus, said that the stock market “will come back”, adding that “the fundamentals of this economy are strong”.

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