The World Health Organization’s director-general, Tedros Adhanom Ghebreyesus has warned global markets over panicking and the need to “calm down” and “see the reality.”
On Sunday the director general warned that global market panic is not necessary and will cause more damage as “we need to be rational.”
During a panel discussion at the King Salman Humanitarian Aid Center’s International Humanitarian Forum in Riyadh, he told CNBC, “Global markets … should calm down and try to see the reality.
“We need to continue to be rational. Irrationality doesn’t help. We need to deal with the facts.
“We need to go into the numbers, we need to go into the facts, and do the right thing instead of panicking. Panic and fear is the worst.”
His comments come as the Dow Jones plunged 3,500 points last week, whilst the FTSE 100 lost £200bn. The FTSE 100 Index closed down on Friday 3.18%, a fall of 215 points. This was the lowest closing level since July 2016.
The coronavirus has disrupted international travel and supply chains as three more continents have reported cases of the virus last week, which is fuelling fears of a recession in the Euro Zone and the US.
Pek Ozkardeskaya, senior analyst at Swissquote Bank said, “It is important for investors to understand that the actual sell-off is amplified by a general panic.
“This is the worst week since 2008 and the paranoia grows.”
But, Ozkardeskaya added, “To us, it appears that the market has gone ahead of itself and a rebound should be around the corner.
“The coronavirus outbreak has certainly hit businesses, and it might have a longer-than-expected negative impact on company earnings and global growth.
“Yet the extension of the sell-off we are seeing may be a bit too dramatic, even compared with the significant downshift in valuations.
“Market calamity will certainly leave its place to recovery at some point.”
Last week the WHO director general said, “Based on the facts on the ground, containment is possible.
“But the window of opportunity for containing it is narrowing. So, we need to preparing side by side for a pandemic.”
“Containment works. But at the same time, we cannot be sure. This thing could change direction and be worse. That’s why we prepare for the worst.”