US stock market plunges amid coronavirus fears, Australian market expected to follow

US Stocks have slumped overnight amid fears of the impact of the COVID-19 coronavirus.

The Dow Jones has plunged 900 points as coronavirus cases outside of China rise.

The Australian share market is expected to follow that lead.

Yesterday the ASX lost 2.25 per cent, it’s biggest one-day fall since August, and it’s only set to get worse.

Nicki Hutley from Deloitte Access Economics says the virus comes on top of existing pressures depressing the Australian market.

“This is coming on top of the bushfires and coming on top of a relatively weak Australian economy as well,” she told 3AW’s Ross and John.

But it’s not the virus itself that’s the problem, it’s the global response to the outbreak, and its effects will last much longer than coronavirus.

“We’ve got travel bans, which obviously is affecting tourism to a certain degree, business travel, those sorts of things, the education sector for Australia,” Ms Hutley said.

“Then we’ve got the impact on global supply chains.

“Roughly 37 per cent of world growth in the last decade or so has come from China. Workers still can’t get to factories, they can’t get to ports, we’re hearing about delays in shipments.

“The third thing is fear itself.

“It’s this irrational fear of going out for a meal.”

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Image: (Right) NurPhoto / Getty