Stocks slump on fears the Wuhan coronavirus will hammer global growth
- Stocks plunged on Thursday as investors braced for the economic fallout of Wuhan coronavirus.
- Th flu-like illness has infected more than 7,700 people, killed at least 170, and spread to upwards of 20 countries.
- "If the coronavirus outbreak persists, the effects will be felt though global growth, trade and global value chains as well as in specific sectors such as transport and tourism," analysts said.
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Stocks tumbled on Thursday as Wuhan coronavirus spread to at least 20 countries, fueling fears that it could weaken global economy growth.The flu-like illness has infected more than 7,700 people and killed at least 170. India, Finland, Japan, the Philippines, and the United Arab Emirates have confirmed cases in recent days.Advertisement
The World Health Organization said incidents of human-to-human transmission outside China were of "great concern," and its experts will meet today to decide whether to declare the outbreak a global emergency, according to the Associated Press.
The deadly epidemic could slow China's economic growth to 5% or lower this quarter, government economist Zhang Ming told Caijing magazine this week, according to Reuters. It grew 6% last quarter, a 30-year low.Analysts warned that the economic fallout, like the virus, won't be contained to China.
"If the coronavirus outbreak persists, the effects will be felt though global growth, trade and global value chains as well as in specific sectors such as transport and tourism," wrote Elwin de Groot, RaboResearch's head of macro strategy, and his team in a report this week.The analysts also predicted the Wuhan coronavirus would hit the world economy harder than the SARS epidemic in 2002 and 2003. They argued China is bigger, more interlinked with the global economy, and more vulnerable today than it was 17 years ago.The gloomy outlook spurred investors to ditch stocks and buy gold on Thursday.Advertisement
"The mood in the market is one of severe concern," Neil Wilson, chief market analyst at Markets.com, said in a morning note.
Here's the market roundup as of 10:10 a.m. in London (5:10 a.m. in New York):European equities are down. Germany's DAX slid 0.9%, Britain's FTSE 100 fell 0.7%, and the Euro Stoxx 50 dropped 0.9%.Advertisement
Chinese markets are closed for Lunar New Year, but other Asian indexes plunged. Taiwan's TWEX plummeted 5.8%, Hong Kong's Hang Seng slumped 2.6% and Japan's Nikkei dropped 1.7%.
US stocks are set to drop. Futures underlying the Dow Jones Industrial Average, S&P 500, and Nasdaq fell by 0.5% to 0.6%.Gold climbed 0.5% to about $1,578 per ounce, its highest level since 2013.Advertisement
China's renminbi slid 0.4% t0 6.9950 against the dollar, its lowest level this year.