Australia: Shares post worst weekly drop since 2008 financial crisis

[SYDNEY] Australian shares posted their worst weekly drop since the 2008 global financial crisis on Friday as fears of a rapidly spreading coronavirus tipping to a pandemic and spurring a global recession dampened sentiment.

The S&P/ASX 200 index tumbled 3.3 per cent, or 216.70 points, to 6,441.20 at the close of trade to post its worst monthly decline since August 2015. The benchmark slipped 0.8 per cent on Thursday.

The virus has spread at a rapid pace globally, with countries other than China accounting for about three quarters of new infections, prompting governments to stockpile medical supplies, order schools shut and cancel big gatherings to curb the spread of the flu-like virus.

Ratings agency Moody's said the odds of a coronavirus pandemic are rising and added that a pandemic will trigger a global and U.S. recessions during the first half of this year.

The investors were also risk averse ahead of factory data from Australia's largest trade partner - China, set to be released over the weekend, to gauge the tangible impact of an epidemic which has restricted business operations in the mainland.

Activity in China's vast manufacturing sector likely shrank at the fastest pace in February since the global financial crisis, according to a Reuters poll.

The Australian benchmark has slid 10.5 per cent since its last peak a week ago, putting the market in a technical correction.

New Zealand's benchmark S&P/NZX 50 index dropped 1.5 per cent, or 176.01 points, to finish the session at 11,261.16.

REUTERS