Global Stocks Drop Amid Outbreak of Deadly Virus in China
21 January 2020 - 10:42AM
Dow Jones News
By Avantika Chilkoti and Steven Russolillo
Global stocks dropped on Tuesday, led by Asian markets, amid
concerns about the rapid spread of a potentially deadly
pneumonialike virus originating in central China.
Futures tied to the Dow Jones Industrial Average edged down 0.3%
after the public holiday on Monday. The pan-continental Stoxx
Europe 600 index dropped 0.7%. The Shanghai Composite closed 1.4%
lower in its biggest drop in over two months, while the Chinese
yuan lost almost 0.6% against the dollar in offshore trading.
The newly identified virus has spread between humans, a leading
Chinese health official said, fueling concerns that the disease
could quickly be transmitted across Asia as millions of Chinese
travel for the annual Lunar New Year holiday. The virus has already
claimed four lives as the number of confirmed cases tripled on
Monday. A similar coronavirus led to the outbreak of severe acute
respiratory syndrome, or SARS, in late 2002 in southern China,
killing 774 people.
"The economic consequences could be extremely concerning," said
Rajiv Biswas, chief economist for the Asia-Pacific region at IHS
Markit. "China's international tourism has boomed, so the risks of
a global SARS-like virus epidemic spreading globally have become
even more severe."
Shares of airlines, cinemas and restaurant operators were the
biggest losers in the Chinese market as investors tried to decipher
the impact of the disease in the region. Japan's Nikkei 225
benchmark also fell 0.9%.
Hong Kong's Hang Seng benchmark was the worst performer among
major Asian benchmarks, closing down 2.8% in its biggest decline in
over five months. Adding to the gloom in Hong Kong, Moody's
Investors Service downgraded the city's credit rating. The ratings
firm blamed the government for failing to properly deal with seven
months of social unrest, which has driven the economy into
recession.
Among European equities, major market moves were driven by
corporate results. EasyJet gained 5.4% after the budget airline
posted higher-than-expected revenue for the fiscal first quarter
and boosted its forecast for revenue per seat for the first half of
the year.
Hugo Boss ticked up 3.4% after the German fashion house's sales
in the fourth quarter exceeded analysts' expectations, buoyed by
momentum in Europe and China.
Among the biggest losers was UBS Group, which retreated over 5%
after the Swiss banking giant missed its key 2019 targets and cut
guidance.
Later in the day, a string of U.S. companies are scheduled to
report earnings including Netflix and International Business
Machines Corp.
(END) Dow Jones Newswires
January 21, 2020 05:27 ET (10:27 GMT)
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