LONDON: Financial markets rebounded outside Asia on Tuesday following a global sell-off fuelled by the new deadly virus outbreak in China.

Europe’s main stock markets closed with gains of close to 1.0 per cent after shedding around 2.5pc on Monday.

The Dow index in New York added 0.7pc in midday exchanges after US consumer confidence rose by more than expected in January.

US defence contractors Lockheed Martin and United Technologies also released strong results that underpinned market sentiment.

Tokyo had already exte­nded its losses but Tuesday’s drop was a relatively light 0.6pc.

The dollar gained against most other major currencies, and oil prices were higher as well.

“Calm has descended across global markets after yesterday’s sell-off,” said Neil Wilson, chief market analyst at Markets.com.

Markets remain “open to further falls if it becomes clear that infection is spreading more rapidly, but for now equity markets are entering a process of stabilisation”, he added.

China on Tuesday urged citizens to postpone foreign travel to curb a viral outbreak that has killed more than 100 people, as the first cases of human-to-human contagion were detected abroad.

While traders have sought safety, for example buying into gold, oil tanked Monday on expectations that demand in China, the world’s top consumer, 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.

Analysts were concerned the crisis could become as bad as the SARS outbreak that rocked markets and the global economy 17 years ago.

It comes just as the world economy showed signs of stability after a long-running growth slowdown.

Published in Dawn, January 29th, 2020