The global coronavirus pandemic has sparked an economic "crisis like no other," sending world GDP plunging 4.9 percent this year and wiping out $12 trillion over two years, the IMF said Wednesday.

Worldwide business shutdowns destroyed hundreds of millions of jobs, and the prospects for recovery -- along with the forecasts themselves -- are steeped in "pervasive uncertainty" with the virus still rife, the IMF said in its updated World Economic Outlook.

The US economy is set to contract eight percent in 2020, while China fares slightly better, posting growth of one percent, the report said.

The shutdowns of transport and production mean world trade will plunge nearly 12 percent, and the IMF cautioned that trade and geopolitical tensions between the world's largest economies could undercut the modest recovery in 2021.

Equities sink as virus spikes fuel worries over reopening
Hong Kong (AFP) June 25, 2020 - A sharp rise in fresh virus infections in the US and elsewhere sparked a hard sell-off in equities Thursday, following hefty losses on Wall Street and in Europe.

Concerns about a possible trade battle between Washington and Europe added to the downbeat mood on trading floors, with a warning from the International Monetary Fund over the global outlook also souring sentiment.

A three-month surge across world markets, supported by the easing of lockdown measures and a wall of government cash, is showing signs of stalling as the killer virus sees a resurgence and raises questions about the pace of reopening.

A key worry is the US, where dozens of states including Texas, Florida and Arizona have seen a spike in infections in recent days.

Some US officials who loosened restrictions on business, dining, public gatherings and tourism are now urging residents to again stay home.

Disneyland, near Los Angeles, delayed its planned July 17 reopening without announcing a new reopening date for the world's second-most visited theme park, while Apple and Nike have closed stores that had recently reopened.

The issue is becoming so bad that New York, Connecticut and New Jersey said they will impose a 14-day quarantine on people arriving from areas with high infection rates.

Elsewhere, Australia's military announced it would send 1,000 troops to Melbourne to help contain the country's only significant outbreak over fears of a second wave.

And around 640,000 people in two German districts were facing new containment measures after an outbreak at a slaughterhouse.

Experts warn that an early summer heatwave across Europe could lead to a surge in infections as people hit beaches and parks while ignoring social distancing measures.

"Clearly the market really got the shivers over the prospect of a big increase in COVID and maybe starting to see places that were opening up have to close up, pressing the economy and lowering the prospects for the stock market," Margie Patel, at Wells Fargo Asset Management, told Bloomberg TV.

"We've had such a great run from the end of March it's only inevitable that we should get at least a little step back on the way to higher prices over the course of the year."

- Trade back in focus -

Tokyo ended the morning session 1.3 percent lower, while Seoul and Sydney both sank more than two percent.

Singapore dropped 1.4 percent, while Wellington, Manila and Jakarta were also deep in the red.

Hong Kong and Shanghai were closed for holidays.

The financial devastation wrought by lockdowns was laid bare Wednesday by the IMF, which said the crisis would shrink the global economy by 4.9 percent this year and wipe out a mind-boggling $12 trillion over two years.

Adding to uncertainty was news that the US is considering tariffs on $3.1 billion in European imports as part of a dispute over subsidies to plane manufacturer Airbus.

That came just days after the EU indicated it plans to press ahead with a digital tax that would primarily hit US tech firms.

Trade officials listed products from France, Germany, Spain or Britain, ranging from olives to decaffeinated coffee, as possibly subject to the new levies.

But while the development, which comes on top of growing concerns about tensions between China and the US, is a worry, AxiCorp's Stephen Innes said the spike in infections was crucial.

"It is worth noting the US administration's proclivity to walk-back trade frictions," he said in a note.

"Recent history suggests (Donald Trump) can and will react to negative news that adversely impacts the stock market, and which is within the White House control.

"By contrast, stemming the negative market impact of rising COVID-19 cases is difficult for policymakers to control."

He added that markets were unlikely to break higher until consumer confidence returned.

The shift away from risk assets saw the dollar rise against higher-yielding currencies with the Australian dollar and Mexican peso down around one percent.

Oil fell more than one percent, extending Wednesday's five percent tumble, as increasing infections fuel demand worries, while data showed US stockpiles saw another big jump for the third week in a row.

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Markets mixed as investors track second wave, new lockdowns
Hong Kong (AFP) June 24, 2020
Equities were mixed Wednesday in Asia after a healthy run-up the day before as traders weigh positive data suggesting economies are recovering against signs of a second wave of infections and the reintroduction of some lockdowns. While governments and central banks have provided a wall of cash to support markets, investors are walking a tightrope between hopes the easing of restrictions will lead to a rebound and the possibility that looser measures will inflame the pandemic again. After a rally ... read more