Coronavirus market impact

As the reaction to coronavirus continues to cause dramatic market movements, traders are choose us because we've been delivering a world-class trading experience for over 45 years.1

Follow the impact the disease is having on finanial markets here, and discover how we can help you navigate volatility.

Call +61 3 9860 1799 or email helpdesk.en@ig.com to talk about opening a trading account. We’re here 24 hours a day, from 8am Saturday to 10pm Friday (UK time).

Contact us: +61 3 9860 1799

How is the coronavirus impacting financial markets?

The coronavirus outbreak has caused far-reaching social and economic disruption, and markets are reeling as a result.

Economies around the globe could suffer big hits to GDP growth, as increasing lockdown measures alter supply and demand – with millions of people off work, schools shutting and thousands of restaurants and other businesses closed. Global financial markets are experiencing extreme volatility as a result, as investors grapple with the multitude of effects the virus could have.

To highlight the impact that coronavirus is having on global markets, we’ve taken a look at the way the S&P 500 – a common benchmark for global economic health – has reacted compared to other market crashes.

  • The first chart to the right shows that the initial few days of coronavirus volatility had a much more rapid impact than the other crashes
  • The second chart indicates that the effects of coronavirus are likely to be in their infancy
  • From the final chart, we can see that it has taken the stock market varying periods of time to recover from each crash – so we could see the effects of coronavirus last up to a year or much longer

Read more on the markets’ reaction to coronavirus, or take a look at our latest news and trade ideas.

Comparing the impact of coronavirus and historical crashes on the S&P 500

  • Initial impact
  • What happened next
  • Recovery

Day zero on the chart is the final high of the S&P 500 at market close, before the bear market began.
Data is accurate as of 22 June 2020

Day zero on the chart is the final high of the S&P 500 at market close, before the bear market began.
Data is accurate as of 22 June 2020

Day zero on the chart is the final high of the S&P 500 at market close, before the bear market began.
Data is accurate as of 22 June 2020

Why trade market volatility with IG?

Access round-the-clock trading

Trade our 24/72 indices, including Wall Street, the FTSE 100 and Germany 30

Trade exclusive weekend markets

Speculate or hedge using our weekend markets on key global indices and forex pairs

Go long or short

Speculate on over 17,000 financial markets via CFDs

Guaranteed risk protection

A guaranteed stop limits your downside risk and you’ll only incur a fee if it’s triggered3

React instantly to price movement

Choose from our unique range of price alerts to stay up to date with volatility

Benefit from our competitive spreads

Keep your costs down with our tight spreads and low costs

Coronavirus and market volatility

  • What's happening now
  • What could be to come
  • What's happened already

The table below shows the live prices for some of the financial markets that have been impacted by coronavirus volatility.

Sell
Buy
Change
-
-
-
-
-
-
-
-
-

Open an account today to react to news, or practise trading in a demo account.

Although there's no way to know for sure what the lasting effects of Covid-19 could be on financial markets, discussions have become increasingly forward-thinking as countries begin to discuss the easing of lockdown measures and a potential second wave of infection.

While the economic measures to support businesses and individuals throughout this crisis may lessen the impact, the 'new normal' of social distancing will inevitably have a significant effect on travel, tourism and consumption.

At times like this, markets tend to trade on herd sentiment and news flow. With that in mind, it's important to keep an eye on the latest news and ensure you have a suitable risk management strategy in place.

Take a look at IG analyst Josh Mahony’s summaries of recent market activity below.

Stocks

While coronavirus volatility started in mid-February, it came to a head on what's being called the new ‘Black Monday’ – 9 March 2020. The day saw global stock markets collapse in one of the largest single-day declines since the financial crisis of 2007-2009.

Travel firms were at the sharp end of the sell-off and have continued to see volatility, as lockdowns have caused a standstill.

Throughout earnings season, the focus will likely be less on profits and more on which companies could survive the economic downturn. The sharp decline in the stock market has meant that estimates remain low, but that many companies could be set to beat the forecasts.

Indices

Stock indices have experienced significant price fluctuations in response to the ongoing situation. On Black Monday, US indices hit the limit down of 7%, causing the NYSE to halt trading.

The automatic stabilisers have been triggered numerous times as the economic fallout of this global pandemic plays out. In the UK, the FTSE 100 fell to an eight and half year low following the news that the country would go into lockdown.

Commodities

Oil markets have seen significant volatility caused by lower demand. Oversupply continues despite OPEC+ cuts, which has caused a lack of global storage capacity.

On Monday 20 April, traders were faced with the prospect of being forced to take physical delivery of oil, leading to large numbers of speculators dumping their futures contracts at whatever the cost. This caused the price of oil to fall into negative numbers for the first time ever.

It remains to be seen how the market will respond to production cuts and lockdown easing in the UK and US. But we will likely see a lasting impact on oil market liquidity, as traders move away from contracts with upcoming expiry dates – which could lead to greater volatility.

Forex

The US dollar’s ‘haven’ status has continued to see the currency increase in value. Traders are focusing on the optimism that comes with the huge amount of fiscal stimulus we’re seeing, rather than the devaluation associated with huge growth in the Fed balance sheet.

Open a trading account to trade volatility

Fill in our simple online form

We’ll ask a few questions about your trading experience.

Get swift verification

We can usually verify your ID in just a few seconds.

Fund your account and trade

Or practise on a demo if you’d prefer.

Open an account now

Fast execution on a huge range of markets

Enjoy flexible access to more than 17,000 global markets, with reliable execution

Deal seamlessly, wherever you are

Trade on the move with our natively designed, award-winning trading app

Feel secure with a trusted provider

With 45 of experience, we’re proud to offer a truly market-leading service

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

You might be interested in…

A step-by-step guide on how to trade CFDs

Catch up on latest analysis and insights from our in-house experts.

Trade with our award-winning trading app4, cutting-edge web platform and specialist third-party offerings.

1 Based on revenue excluding FX (published half-yearly financial statements, June 2019); for forex based on number of primary relationships with FX traders (Investment Trends UK Leveraged Trading Report released July 2019).

224/7 excludes the 10 hours from 10pm Fri to 8am Sat (UK time), and 20 mins just before the weekday market opens on Sunday night.

3A small premium is payable if a guaranteed stop is triggered.

4 As awarded at the Investors Chronicle and Financial Times Investment and Wealth Management Awards 2018, and the Professional Trader Awards 2019.