LONDON: Most stock markets were weaker on Monday as investors worried over the impact of China’s coronavirus outbreak on the global economy.
In Europe, London gave up 0.3 per cent, Paris closed 0.2pc lower, and Frankfurt also slid by almost 0.2pc, after all pared bigger losses as US markets continued to climb.
In New York, the Dow Jones index had gained 0.3pc in midday trading.
“US stocks are extending last week’s sharp rebound after overcoming an early bout of selling pressure this morning as coronavirus concerns linger, but Chinese factories are getting back on line and M&A activity is heating up,” analysts at the Charles Schwab brokerage commented in reference to mergers and acquisitions.
The coronavirus 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.
Earlier on Monday in Asia, Tokyo’s benchmark Nikkei 225 index closed 0.6pc down, while Hong Kong pared some losses, ending the day 0.6pc lower after tanking 1.1pc at the open.
Like New York however, Shanghai bucked the trend with a 0.5pc gain at the close.
“Some of the larger Chinese manufacturers seem set to return to work this week,” noted senior market analyst Edward Moya at the online broker Oanda.
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 Monday, which showed the highest rise in consumer prices in more than eight years, with food prices spiking more than 20 percent.
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.
Depressed economic activity in China, the world’s largest importer and consumer of oil, 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.
On Monday, the contract for Brent crude was 1.7 percent lower in late European trades, while West Texas Intermediate showed a decline of 1.1 percent.
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.
Published in Dawn, February 11th, 2020