Stocks and oil prices fall on pandemic fears

LONDON: World stock markets and oil prices tumbled yesterday, with Milan and Seoul falling hardest on growing fears of a coronavirus pandemic, as gold hit a seven-year peak on safe-haven buying, dealers said. In late morning deals, Milan’s stock market dived almost five percent following reports of a fourth death amid the COVID-19 epidemic, an 84-year old man in the northern Lombardy region.

It was the third death in Lombardy, where villages have been sealed off and security measures enforced to stem the spread of the disease. Traders’ screens were awash with red elsewhere in Europe too, with Frankfurt falling 3.7 percent, London losing 3.5 percent, Madrid down 3.3 percent and Paris shedding 3.8 percent.

Brent oil prices slumped four percent as the burgeoning crisis sparked global energy demand worries. Conversely, on the London Bullion Market gold surged to $1,689.31 per ounce-a level last seen in January 2013 — as investors snapped up the precious metal as a safety measure amid the market turbulence.

Equities ‘deeply in the red’

“Fears over an escalation of the coronavirus outside of China have caused a major retreat in global markets and prompted wild swings in commodity prices,” said AJ Bell investment director Russ Mould. “Italy’s lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected. A large spike in coronavirus cases in South Korea has also added to market concerns.

“The result is a large sell-off in equities with... Europe and Asia deeply in the red,” Mould added. Seoul nosedived 3.9 percent as South Korea announced a surge in COVID-19 infections, while Hong Kong erased 1.8 percent but Shanghai retreated by only 0.3 percent. With the outbreak showing little sign of easing, investors are increasingly concerned it could have a much longer-term impact on the world economy.

Traders had been broadly optimistic that the viruswhich has killed nearly 2,600 and infected 80,000 — was being contained outside China but a spurt of infections and deaths in other countries including South Korea, Italy and Iran has fanned fears of a global outbreak. — AFP