World Stocks Skid on Virus Fears 01/27 06:38
Stock markets and the price of oil tumbled Monday after China announced
sharp increases in the number of people infected with a potentially deadly
BANGKOK (AP) -- Stock markets and the price of oil tumbled Monday after
China announced sharp increases in the number of people infected with a
potentially deadly virus.
In Paris, the CAC 40 lost 2.2% to 5,889 while Germany's DAX skidded 2.3% to
13,271. Britain's FTSE 100 gave up 2.3% to 7,414. Shares also looked set for
declines on Wall Street, where the future contracts for the S&P 500 and the Dow
Jones Industrial Average both sank 1.5%.
China announced it was extending its week-long public holiday by an extra
three days as a precaution against having the virus spread still further. By
midnight Sunday, the National Health Commission said 80 people had died out of
2,744 cases that were confirmed.
Various governments have announced plans to evacuate people from Wuhan, the
central Chinese city at the center of the pandemic. China halted outbound tours
and Wuhan and some other cities stopped public transport, obliging tens of
millions of people to stay where they are at the time of the country's peak
Many Asian markets, including China's, were closed for Lunar New Year
holidays, while Australia was closed for Australia Day. Tokyo's Nikkei 225
index sank 2% to 23,343.51. India's Sensex lost 1% to 41,204.15, while the
benchmark in Thailand dropped 3.1%. Indonesia's share benchmark was 1.8% lower.
Apart from the direct impact on tourism and travel, "any economic shock to
China's colossal industrial and consumption engines will spread rapidly to
other countries through the increased trade and financial linkages associated
with globalization," Stephen Innes of AxiCorp said in a commentary.
The virus that has spread to a dozen countries in addition to Hong Kong and
Macau can cause pneumonia and other severe respiratory symptoms. The World
Health Organization has not yet declared the situation a global emergency,
which would bring more money and resources to fight it, but could trigger still
more economically damaging restrictions on trade and travel.
On Friday, the S&P 500 had its worst day since early October, dropping 0.9%
as health care stocks saw steep losses. The sell-off followed news that a
Chicago woman had become the second U.S. patient diagnosed with the new virus
Investors have been shifting money into safe-play, high-dividend stocks and
government bonds.The surge in bond-buying has sent yields lower.
Investors also are digging through the latest batch of company earnings
reports, including strong results from chipmaker Intel and American Express.
This week is shaping up to be the busiest week for earnings, with roughly 40%
of the companies in the S&P 500 due to issue their results for the last three
months of 2019.
Benchmark U.S. crude gave up $1.71 to $52.48 per barrel in electronic
trading on the New York Mercantile Exchange. It lost $1.40 to $54.19 per barrel
on Friday. Brent crude, the international standard, declined $2.63 to $58.06
per barrel. It shed $1.39 to $59.89 per barrel on Friday.
In currency trading, the dollar weakened to 108.94 Japanese yen from 109.28
yen. The euro was steady at $1.1020.