Market Spice: Global Markets Catch Coronavirus

Week of January 27th, 2020

Delany Higgins

Asia 

  • The impacts of coronavirus, declared a global health emergency on Thursday by the WHO, have spread far beyond China. Roughly 10,000 cases were reported before the end of the week. 
  • Hong Kong stocks sank, but with the emergence of some positive economic data, including on Chinese manufacturing, other Asian markets experienced a welcome rebound. 
  • Citigroup revised its 2020 growth forecast for China to 5.5%, down from 5.8%.

Europe 

  • Britain officially left the EU on Friday at 11pm GMT. Britain’s pound has remained strong lately, but with the effect of weighing down UK stocks at this important moment. Saturday morning’s spike in paracetamol sales is likely insufficient to help the stock of popular chemist Boots, which has declined 27.9% over the past year.
  • S&P Global and Moody’s warned that more difficult UK-EU relations post-Brexit could lead to a downgrade in the UK’s credit rating. 
  • Particularly hit by mining and oil concerns, and the emergence of fresh coronavirus cases in Europe, the Stoxx 600 closed down 1%.

North America 

  • In the US, the Dow closed down 1.7%, and uncertainty around coronavirus saw Treasury yields drop. 
  • US oil prices dropped near a 6-month low.

Other Markets

  • The Brazilian real hit a record low of 4.2791 to the dollar, and stocks fell over 1%.
  • Chilean stocks rose 0.4% with positive manufacturing data, while Argentine and Colombian equities fell 0.4% and 0.2% respectively. 
  • With risk appetite generally down, the MSCI emerging-market index declined 1.11%.

Image Source: CNBC World Markets Heat Map

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