Coronavirus wipes out $1.5tn from world markets
The ink was barely dry on Wall Street’s 2020 outlooks when the first coronavirus case surfaced in Wuhan, China. But what began as a single patient suffering pneumonia-like symptoms on December 12 has morphed into a deadly virus that’s sent global markets reeling.
A quick estimates shows the coronavirus has wiped US$1.5tn off the value of world stock markets since January 20, when a slide in Hong Kong shares kicked off concerns among traders. Yet with Chinese and Hong Kong exchanges shut for an extended holiday, that’s a lowball figure.
As Treasuries drift and US stock-futures gain in early Tuesday trading, the epidemic’s toll looms large across assets. Raw materials have been hit hardest, with the Bloomberg Commodity Spot Index slumping 4.5 per cent. Meanwhile havens have rallied as investors seek safety.
“Looking at the impact of SARS in 2002-2003, US equity markets fell by about 10 per cent before recovering,” said Peter Kisler, portfolio manager at North Asset Management. “We could easily see a similar move today, as almost all assets are trading at very expensive levels.”