Stock markets slide amid fears coronavirus spread could hit growth

25-Feb-2020 Intellasia | The Guardian | 6:02 AM Print This Post

Stock markets have slumped around the world as the deadly coronavirus continued to spread across Europe and Asia, with airlines and tourism companies taking a heavy hit.

Growing fears of a coronavirus pandemic pushed stock markets in Europe and Asia sharply lower. Investors are piling into “safe haven” investments such as gold, sending gold prices surging to a seven-year high above $1,679 (GBP 1,3012) an ounce.

The FTSE 100 index in London lost 240 points to 7163.70, a 3.2 percent drop. Among the worst-hit stocks were the budget airline easyJet, down 12.6%, tour operator Tui, down 7.9%, and British Airways owner IAG, down 7.5%. Shares in Carnival, the cruise ship operator which has faced an outbreak of the virus on its Diamond Princess cruise ship, shed 6.4%.

Related: Tell us: how has coronavirus affected small businesses in the UK?

The biggest losses were on the Italian stock market, which tumbled 1,095 points to 23,676.17, a 4.3 percent fall, putting it on track for its worst day since 2016. Italy reported its fourth death from the coronavirus on Monday as the number of cases has risen to to 152, the highest number outside Asia.

Italian authorities have responded by locking down 12 cities and the Venice carnival has also been cut short by two days. Elsewhere in Europe, Germany’s Dax index fell 3.5 percent while France’s CAC 40 lost 3.7%.

In Asia, Hong Kong’s Hang Seng index fell 1.8%, while South Korea’s Kospi slumped 3.9%. The country has seen coronavirus cases spike to 763. Japan’s stock market was closed for a scheduled holiday.

Chris Beauchamp, the chief market analyst at online trading firm IG, said: “It has been a while since the term ‘sea of red’ was last deployed to describe the market action, but it seems appropriate this morning.

“The idea that the coronavirus has been fully contained has been firmly banished, and investors are now on notice to expect more cases and, sadly, more deaths. This means the economic forecasts of the impact, such as they are, will need to be revised, with a greater impact now to be expected.”

The Beijing motor show in late April has been postponed. Meanwhile, the Primark owner Associated British Foods has warned there could be shortages of some clothing lines later this year if factory shutdowns in China are prolonged. ABF sources more than 40 percent of Primark’s products from China.


Category: FinanceAsia

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