Global stock markets wobble on China’s coronavirus woes

Most stock markets sink on Monday with investors worried over the impact of China’s coronavirus outbreak on the global economy. In afternoon European trades, London and Paris were both down 0.4 per cent, while Frankfurt slid 0.3 per cent.

The Dow was essentially unchanged in initial New York trades. “Coronavirus concerns are weighing,” noted CMC Markets UK analyst David Madden.

“The deepening health crisis is chipping away at market confidence.

“In London, stocks that are connected to China are under pressure. Mining, energy as well as travel stocks are in the red.” The virus has killed more than 900 people, infected more than 40,000 across mainland China and spread to more than two dozen countries in what is now considered a global health emergency.

It has also disrupted major supply chains for items such as food, household goods, and car and electronics parts.

In Asia, Tokyo’s benchmark Nikkei 225 index closed 0.6 per cent down, while Hong Kong pared some losses, ending the day 0.6 per cent lower after tanking 1.1 per cent at the open.

Shanghai bucked the trend with a 0.5 per cent gain at the close.

Investors worldwide have been watching with concern as China, the world’s second-largest economy, battles the novel coronavirus, which emerged at the end of last year in the central city of Wuhan.

The domestic impact was reflected in China’s inflation figures released on Monday, which showed the highest rise in consumer prices in more than eight years, with food prices spiking more than 20 per cent.

It has also disrupted the supply chains of major global firms such as Apple supplier Foxconn and auto giant Toyota. Key production facilities across China have been temporarily closed as authorities impose lockdowns and quarantine measures.

Oil slips lower - Depressed economic activity in China, the world’s largest importer and consumer of oil, has also hit energy prices. A committee appointed by oil cartel OPEC recommended additional output cuts on Saturday, citing the negative impact of the epidemic on economic activity.

The contract for Brent crude was 1.1 per cent lower in afternoon exchanges, while West Texas Intermediate showed a decline of 0.7 per cent on Monday.

Separately, cryptocurrency bitcoin rallied to stand above $10,000 for the first time since September, though analysts did not attribute the move to any one factor in particular.

 Latam assets dip on coronavirus fears; Brazil’s real hits new low By Shreyashi Sanyal Feb 10 (Reuters) - Latin American stocks and currencies were flat on Monday, on little demand for riskier assets in the face of a rising death toll from the coronavirus outbreak in China, while Brazil’s real hit a fresh all-time low. Risk assets across the region have been hit by worries of a slowdown caused by the epidemic in China, which is a major export destination for Latin American goods. “Investors are quite worried about the overly negative impact of the coronavirus on the global economy,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.  

On Sunday, 97 more fatalities were recorded - the largest number in a single day since the virus was detected in the Chinese city of Wuhan in December. The death toll from the virus has risen to 908 so far. MSCI’s index for Latin American currencies fell 0.3%, with the Brazilian real weakening 0.1% to 4.3274 per dollar. The currency of South America’s biggest economy logged its sixth weekly drop on Friday, with traders testing the central bank’s resolve not to intervene in the market to arrest its decline. Also weighing on emerging market currencies was a stronger dollar. The greenback hit a four-month high against the euro on Monday, boosted by higher safe-haven demand and a bullish outlook for the US economy. The Colombian peso eased as prices of oil, the country’s main export, fell on weaker Chinese demand. In Argentina, its new government heads into do-or-die talks this week with its biggest creditor, the International Monetary Fund, seeking a deal to postpone debt payments while honoring a promise to voters to not go along with painful budget cuts.

The country’s peso currency weakened against the dollar on Monday. Other major currencies in the region - the Mexican peso, the Chilean peso and the Peruvian sol - also eased against the greenback. Chilean stocks fell more than 1%, with the largest South American airline, LATAM Airlines Group, leading the decline. The fast-spreading virus in China has hit the travel and tourism industry around the world. Key Latin American stock indexes and currencies at 1516 GMT Stock indexes Latest Daily % change MSCI Emerging Markets 1085.30 -0.58 MSCI LatAm 2729.73 -0.98 Brazil Bovespa 112828.58 -0.83 Mexico IPC 44307.88 -0.21 Chile IPSA 4631.49 -1.18.

Agencies