Global mar­kets on alert as killer virus fu­els new SARS fears

Kuwait Times - - Business -

LON­DON: World stocks re­sponded yes­ter­day as in­vestors shrugged off fears over a deadly virus from China, while Frank­furt briefly struck a record peak on this month’s land­mark trade deal, an­a­lysts said. Frank­furt eq­ui­ties added 0.1 per­cent, Lon­don won 0.2 per­cent and Paris gained a mar­ginal amount in late morn­ing deals. Asia bounced back on bar­gain-buy­ing fol­low­ing the pre­vi­ous day’s sharp losses but in­vestors were on edge af­ter the deadly coro­n­avirus was con­firmed to have spread to the United States. “Euro­pean stock mar­kets are show­ing small gains de­spite the fears of coro­n­avirus-a case has now been re­ported in Hong Kong,” noted CMC Mar­kets an­a­lyst David Mad­den. “In early trad­ing, the DAX printed a record-high but the mar­ket is off the highs of the ses­sion. “The Chi­nese gov­ern­ment’s re­sponse to the health sit­u­a­tion seems to be more up­front than their han­dling of the SARS cri­sis, so traders are not as fear­ful.”

Mean­while in Frank­furt, the bench­mark DAX 30 in­dex zoomed to a record high at 13,640.06 points, with deal­ers at­tribut­ing the move to the re­cent China-US trade deal. “Ger­man companies are among most ex­posed global trade wor­ries, and there­fore those en­joy­ing the big­gest bounce since US-China re­la­tions im­proved at the back end of last year, re­sult­ing in this month’s trade deal,” said Mar­ an­a­lyst Neil Wil­son.

Global eq­ui­ties have how­ever been roiled this week by fears China virus out­break, which has killed nine and sick­ened hun­dreds, could cause as much eco­nomic dam­age as the SARS epi­demic that killed hun­dreds of peo­ple in 2003.

Shang­hai dropped more than one per­cent in early yes­ter­day trade, ex­tend­ing the pre­vi­ous day’s 1.4 per­cent drop, with au­thor­i­ties bat­tling to con­tain the coro­n­avirus strain as China pre­pares for the Lu­nar New Year hol­i­days, when mil­lions of peo­ple travel across the coun­try.

Of­fi­cials warned yes­ter­day the strain could mu­tate and spread. How­ever, Chi­nese main­land shares per­formed a U-turn to end the day with gains. Tourism-linked firms-which had been hit by con­cerns about the im­pact on the global econ­omy just as it shows signs of a ten­ta­tive re­cov­ery from a long-run­ning slow­down-also en­joyed a re­verse.

Af­ter a sell-off in Asia on Tues­day, news that the US had re­ported its first case of the new virus hit Wall Street, the Dow and S&P 500 sink­ing from record highs. Fears of a big­ger out­break rose on Mon­day af­ter a prom­i­nent ex­pert from China’s Na­tional Health Com­mis­sion con­firmed that the virus can be passed be­tween peo­ple. The World Health Or­ga­ni­za­tion will hold an emer­gency meet­ing later yes­ter­day to de­ter­mine whether to de­clare a global public health emer­gency over the disease, which has also been de­tected in Thai­land, Ja­pan, South Korea and Tai­wan.

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