Coronavirus continues to infect market prices

Our fear that this market sell-off is different has come true as oil prices drop and Italy shuts down

Article updated: 9 March 2020 10:00am Author: Helal Miah

836x222_antibiotic_P_D.jpg

  • Oil prices plunge overnight by nearly 30% as Russia and OPEC fail to agree on production cuts
  • The economic repercussions from the Covid-19 will come to light in the coming weeks and months
  • For investors that have structured their portfolio well then the only thing to really do is sit tight
  • Trying to be active in choppy markets could cause even more damage

Our view of nearly two weeks ago that the market impacts of the Coronavirus would linger has unfortunately come true. We feared that other developed nations could take the same drastic measures to contain the Covid-19 virus by shutting down parts of the country as China did, and indeed this has happened in the North of Italy with a travel ban. To make matters worse, OPEC and Russia have been unable to come to an agreement over cutting oil production in the face of falling prices. Now Saudi Arabia has doubled down and is planning to expand production in an attempt to punish Russia and to wipe out the US shale players, sending oil prices overnight down by nearly 30%. This is the worst price since the first Gulf War.

We do not suspect that this morning’s stock market fall will be the bottom, as the economic repercussions will come to light in the coming weeks and months. There remains the possibility that even more economically significant regions could face a similar fate. What do investors do from here? For most, it’s probably too late to panic. For investors that have structured their portfolio well then the only thing to really do is sit tight. Markets will recover over the medium to longer term which is what investors should be targeting. In the meantime, trying to be active in choppy markets could cause even more damage.


All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Helal Miah portrait photo
Helal Miah

Investment Research Analyst

After graduating with an economics degree from University College London, Helal started his career within private banking at Smith & Williamson Investment Management and later held analyst and fund manager roles with the Industrial Bank of Japan, Schroders and Mitsubishi Corporation. He is a chartered fellow of the Chartered Institute for Securities & Investment. 

See what else we have to say