KUALA LUMPUR: The ringgit weakened against the US dollar in the early trading session today on lingering concerns over Covid-19 and plunging global oil prices, dealers said.

At 9.07am, the local note eased to 4.2330/2370 against the greenback from Monday’s close of 4.2130/2170.

AxiCorp chief market strategist Stephen Innes said the crash in oil prices has reverberated through financial markets following the collapse of an oil supply pact between the Organisation of Petroleum Exporting Countries (OPEC) and Russia on Friday.

“Markets are in the process of pricing in an all-out oil price war, anticipating that producers will work to balloon market share against the backdrop of a Covid-19-driven global demand shock,” he said in a note today.

Brent crude, the benchmark oil price, recovered 5.7 per cent to US$36.32 per barrel as of last count.

The ringgit was traded mixed against other major currencies.

The domestic unit strengthened against the British pound to 5.5236/5297 from 5.5325/5395, and appreciated against the yen to 4.0895/0945 from 4.1086/1137.

It fell against the Singapore dollar to 3.0565/0612 from 3.0428/0467, and was sharply lower against euro to 4.8176/8238 from 4.7982/8044. — Bernama

Hysteria’ as stock markets plunge over oil, Covid-19

WORLD oil prices crashed on Monday, fuelling a vicious selloff on stock markets which were already buckling from the spreading Covid-19 coronavirus outbreak.

Stocks tanked as the global oil market nosedived 30 per cent at one stage after top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts.

Major US indices plunged more than seven per cent – with the Dow finishing more than 2,000 points lower in its worst session since 2008 – following a 15-minute halt to trading early in the session triggered by a seven per cent drop.

In Paris, the CAC-40 index lost over eight per cent, also its worst daily drop since the 2008 financial crisis, while the Dax blue-chip index in Frankfurt saw its sharpest single fall since 2001.

Traders work during the closing bell at the New York Stock Exchange (NYSE) on March 9, 2020 on Wall Street in New York City. – AFP pic

Later in Brazil, the Ibovespa index finished down more than 12 per cent.

“The markets have passed from panic mode into pure hysteria,” said Ayush Ansal, chief investment officer at trading firm Crimson Black Capital.

“Markets were at the breaking point before Saudi Arabia’s decision to launch an oil price war, but this latest development has taken them beyond that.”

Saudi Arabia opened the spigots on Monday, slashing oil prices after Russia refused on Friday to join producers in cutting output to defend prices.

The dizzying oil drop – the steepest since the 1991 Gulf War – sent investors fleeing for safety alongside mounting fears over the worsening coronavirus, which has seen Italy go into total lockdown.

Late on Monday, Italian Prime Minister Giuseppe Conte announced that he was extending a lockdown decree to the entire country.

“This will be remembered as Black Monday,” said analyst Neil Wilson at trading site Markets.com.

Italy’s stock market took the heaviest battering after a chunk of the county’s northern region was sealed off – including Milan and Venice – as authorities struggled to contain the spread and impact of coronavirus.

At the end of an exceptionally volatile trading day, Milan’s FTSE MIB index stood more than 11 per cent lower.

A woman looks at a screen showing the IBEX 35 stock market index at Spain’s principal stock exchange in Madrid. – AFP pic

As the disease claims more lives around the world, dealers are shedding riskier assets for safe haven investment, sending gold and the yen surging and pushing US Treasury yields to record lows while the dollar was broadly lower against the yen, euro and other currencies.

While governments and central banks have unleashed, or are preparing to unleash, stimulus measures, the spread of Covid-19 is putting a huge strain on economies and stoking concerns of a worldwide recession.

Trading floors in Asia were also a sea of red, with Tokyo plunging more than five per cent, Hong Kong more than four and Sydney more than seven per cent.

Saudi equities also tanked, with oil titan Aramco’s shares leading the plunge. The Dubai, Kuwait and Abu Dhabi exchanges also suffered sharp drops.

Oil majors bore the brunt of a fierce wave of selling while other commodities firms also nursed heavy losses.

Hong Kong-listed CNOOC tumbled 17 per cent and PetroChina more than nine per cent, while in Tokyo, Inpex dived 13 per cent. In Sydney, Santos plummeted 27 per cent and Woodside Petroleum tanked 18.4 per cent.

Back in the US, Exxon Mobil slumped 12.2 per cent, while midsized producer Occidental Petroleum plummeted 52.0 per cent and oil services titan Halliburton 37.6 per cent. – AFP