Markets suffer more losses as China virus death toll rises | The Daily Star
12:00 AM, January 29, 2020 / LAST MODIFIED: 12:00 AM, January 29, 2020

Markets suffer more losses as China virus death toll rises

Asian markets tumbled again Tuesday, extending a global sell-off as the toll from a rapidly spreading Chinese virus spiked to more than 100 dead and thousands infected, with investors fretting over the impact on an already fragile world economy.

Traders have been running for the hills as the coronavirus is reported in more countries, with oil also tanking on expectations that demand in China, the world’s top consumer of the commodity, will be hammered.

The outbreak comes during the Lunar New Year break when hundreds of millions of people criss-cross China and spend huge amounts of money.

The government has sealed off Wuhan, the epicentre of the outbreak, and other cities in Hubei province, effectively trapping tens of millions of people, including thousands of foreigners, in a bid to contain the virus.

It has also extended the holiday, initially due to end on January 30, for three days to limit population flows.

Analysts said there were growing fears the crisis could become as bad as the SARS outbreak that hammered markets and the global economy 17 years ago.

The VIX  “fear” index, which measures market volatility, soared by a quarter Monday to its highest level since October, when investors were worried about the China-US trade talks.

The crisis comes just as the world economy was showing signs of stability after a long-running growth slowdown.

“Given that China has rapidly increased its role in the global supply chains, the market continues to price in the worst case, negative growth shock scenarios,” said AxiCorp’s Stephen Innes.

“For the most part, traders are flying blind, knowing nothing about the actual implications of (the virus) for global growth,” he said, adding that  “there remains a growing sense in the market that contagion levels could get worse before they get better”.

Seoul plunged more than three percent and Singapore shed more than two percent while Sydney was off 1.4 percent as investors in those markets returned from a long holiday weekend.

Manila, Jakarta and Wellington both lost more than one percent, while Tokyo ended 0.6 percent down. The losses tracked hefty selling in Europe and New York.

“This is now a sell first, ask questions later situation,” Alec Young at FTSE Russell said.  “Markets hate uncertainty, and the coronavirus is the ultimate uncertainty -- no one knows how badly it will impact the global economy. China is the biggest driver of global growth, so this couldn’t have started in a worse place.”

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Grameenphone:
Type START <space> BR and send SMS it to 22222

Robi:
Type START <space> BR and send SMS it to 2222


Banglalink:
Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News

Top