HomeCoronavirus: Stock markets taken sick again on speed of spread | Business NewsBusinessCoronavirus: Stock markets taken sick again on speed of spread | Business News

Coronavirus: Stock markets taken sick again on speed of spread | Business News

Stock markets are falling sharply again as countries report a surge in coronavirus cases – bolstering investor fears that the outbreak will cause widespread economic damage.

Japan’s Nikkei led the fallers in Asia overnight – down by more than 2% – as authorities reported that a woman who had previously been treated and declared clear of COVID-19 had tested positive for a second time.

South Korea reported its largest daily spike in cases, leaving its KOSPI index firmly in the red.

News of the first confirmed COVID-19 case in California that was not related to travel abroad, also spooked sentiment.

Traders work through the closing minutes of trading Tuesday on the New York Stock Exchange floor on February 25, 2020 in New York City

Why market reaction to new virus is bigger than SARS

The FTSE 100 in London opened almost 2% down, resuming a sell-off this week that had taken a breather on Wednesday despite intense volatility.

Travel and airline stocks took the bulk of the punishment again – with easyJet losing 9% and the owner of British Airways, IAG, down 7%.

Leading the fallers was advertising group WPP after it reported a sharp slowdown in sales. Its shares were 15% off at levels not seen since 2012.

US indices were tipped to follow Europe’s lead on Thursday afternoon, with the Dow Jones Industrial Average and S&P 500 currently expected to lose around 1% according to futures figures.

:: Listen to the Daily podcast with Dermot Murnaghan on Apple Podcasts, Google Podcasts, Spotify, Spreaker

Estimates suggest more than $3.6trn (£2.8trn) was erased from global share values between Monday and Wednesday alone this week – mostly a consequence of worries about damage to the world economy.

While China, the world’s second largest economy, has been widely praised by health experts for its efforts to contain the outbreak this year, it has come at a huge cost to output in the manufacturing powerhouse.

Widespread factory closures and restrictions on movement have left businesses at a standstill and struggling to secure supplies when production has been able to resume.

A man stands in front of empty supermarket shelves in Wuhan, the epicentre of the outbreak
The outbreak has disrupted supplies of goods and raw materials in China

The research consultancy Capital Economics has forecast Chinese growth to contract this year, from levels around 6% over the past two years.

Its chief Asia economist Mark Williams and senior China economist, Julian Evans-Pritchard, wrote: “The longer it continues, the more likely it is that some firms won’t be able to pay workers, and will have to either cut pay, lay people off or shut down altogether.”

Investors have been seeking safe havens over fears Europe and the United States will follow Asia and be forced to bring in disruptive controls of their own to contain the virus.

Gold is currently trading at levels not seen since 2016 while yields on 10-year US government bonds also hit fresh record lows on Thursday.

Oil prices are crumbling too with Brent crude oil trading at $52 a barrel on fears of a slump in demand.

In addition to the surge in coronavirus cases, a growing number of international firms have been reporting a financial impact.

Microsoft said on Wednesday night that its supply chain was returning to normal “at a slower pace than anticipated” after China shutdowns were concluded.

On Thursday, Asia-focused Standard Chartered bank admitted a key earnings target would take longer to achieve because of the virus controls.

Liverpool Standard Chartered logo
Standard Chartered, a London-listed bank, are Liverpool FC’s shirt sponsors. It says a key target could be missed because of the virus

John Menzies, the UK-listed aviation services business, estimated a £6m-£9m hit to annual profits from the virus but added that was based on the assumption the worst would be over by June.

A number of businesses in the UK have been asking workers to avoid the office and work remotely though the official government advice, at this stage, is for firms to take a sensible approach as the vast majority of suspected COVID-19 cases turn out to be negative.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

payday smile logo

PaydaySmile.com is a financial technology company specializing in payday loans and financial solutions. With a keen focus on catering to payday lending needs, the company provides tailored loan options and tools to assist individuals seeking short-term financial assistance. It’s important to note that while we offer financial tools and resources, we are not a direct lender.

Advertiser Disclosure: This website is an independent, advertising-supported comparison service. The card offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

© 2024 PaydaySmile.com . All Rights Reserved.