Coron­avirus wipes out $1.5tn from world mar­kets

Muscat Daily - - BUSINESS -

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.”

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