Brendan McDermid/Reuters
- Global stocks dropped on Tuesday as investors braced for coronavirus to spread as hundreds of millions of people travel across Asia to celebrate Chinese New Year this weekend.
- Travel, retail, and luxury goods stocks fell sharply on fears that the disease, which has already infected 224 people and killed four, will temper consumer demand.
- “The worry is this is another SARS, an outbreak that saw thousands infected and led to hundreds of deaths,” one analyst said.
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Global stocks dropped on Tuesday as investors braced for a wider outbreak of the mysterious coronavirus as hundreds of millions of people travel across Asia to celebrate Chinese New Year this weekend.
China’s National Health Commission confirmed cases of the SARS-like virus spreading between humans on Monday. The disease has already infected 224 people and killed four, according to the Financial Times. The World Health Organization will meet on Wednesday to discuss whether to declare the outbreak an international public health emergency.
Travel, retail, and luxury goods stocks fell sharply on concerns that the disease will hit demand. Airlines slumped on fears of crimped travel plans. Pharma stocks in China rose by their 10% daily limit. A maker of face masks in China surged.
“Markets are worried about this spreading to more cities,” said Neil Wilson at Markets.com.
Here’s the market roundup as of 9:10 a.m. in London (4:10 a.m. ET):
- Asian indexes slumped with China’s Shanghai Composite down 1.4%, Hong Kong’s Hang Seng down 2.8%, and Japan’s Nikkei down 0.9%.
- European equities dropped with Germany’s DAX down 0.6%, Britain’s FTSE 100 down 1.1%, and the Euro Stoxx 50 down 0.9%.
- US stocks are set to fall with futures underlying the Dow Jones Industrial Average and S&P 500 down 0.4%, and Nasdaq futures down 0.6%.
- Oil prices retreated with West Texas Intermediate down 1% at about $58, and Brent crude down 1.2% at $64.40.
- Air China and China Eastern fell by about 3%, Wharf Real Estate Investment — which operates shopping malls in Hong Kong — slid by more than 4%.
- Burberry and Louis Vuitton-owner LVMH slumped 3%.
- Pharmaceutical stocks soared 10% in China. They included Shanghai Kehua Bio-Engineering, a biomedicine company; Jiangsu Sihuan Bioengineering, a specialist in pneumonia drugs; Shandong Lukang Pharmaceutical, a major antibiotics maker.
- Stocks of medical gear makers and vendors, and masks in particular, rose sharply. Knitwear-maker Shanghai Dragon and medical-dressing maker Zhende Medical were up 10%.
- Most US airline stocks slipped in premarket, with Delta sinking about 2%.
“The worry is this is another SARS, an outbreak that saw thousands infected and led to hundreds of deaths,” said Wilson in a morning note. “It also led to billions of dollars of losses and hit Chinese GDP growth by up to one percentage point.”
“We don’t know how bad this will be, but with authorities confirming the disease can spread between humans, it’s wise to be on guard for this outbreak to get worse before it gets better,” he added.
