Stock market instability due to ASX 'preemptively following Wall Street'

Herald Sun Finance Commentator Terry McCrann says the “massive over-reaction" to the coronavirus by both individuals and government will result in “something like a recession”. Mr McCrann said while he was accustomed to “dramatic market falls and sudden recoveries” he hadn’t seen anything quite like the sell-off sparked by the increasing spread of the novel coronavirus, officially known as COVID-19. Australian stocks lifted by three percent on the news American will soon implement an an economic stimulus package to stave off a coronavirus-prompted recession. That rally came off the back of a horror week on the ASX, with the local markets plunging to its lowest level 2008's Global Financial Crisis. Mr McCrann said “the movements on the stock market were not “irrational” but Australia was “preemptively following Wall Street”. “It’s the reaction to the virus both by individuals such as the panicked buying of toilet paper,” or governments banning travel from China” that will impact the economy, he said. “The economy will certainly be negative in both the March and June quarters,” he said.