Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
Principal Secretary National Treasury Julius Muia says the facility will be used to monitor Kenyan students if airlifted from Wuhan, where the virus continues to spread/FILE

Finance

Virus fears infect global markets

Passengers are screened with a thermal scanner at Kuala Lumpur International Airport on January 21, 2020/AFP

NEW YORK, United States, Jan 22 – Asian stock markets slumped Tuesday as a SARS-like virus taking hold in China spooked investors, while sentiment suffered a knock also from a credit-ratings downgrade to major financial hub Hong Kong.

Most European and US markets followed Asia lower after Hong Kong slumped 2.8 percent by the close and Shanghai ended with a loss of 1.4 percent.

Moody’s has lowered its credit rating on Hong Kong, which has likely fallen into recession owing to the unrest as well as the China-US trade war.

AJ Bell investment director Russ Mould attributed the weakness in stock markets in Asia and beyond to “reports the deadly virus has spread to neighboring countries, with all the potential economic disruption that could cause.”

Analysts also cited a muted forecast from the International Monetary Fund, which cut the global growth estimate for 2020 to 3.3 percent, 0.1 percentage point lower than in the prior report released in October, noting an improvement in the US-China trade picture but pointing to weakness in India.

The new coronavirus strain has caused alarm because of its connection to Severe Acute Respiratory Syndrome (SARS), which killed nearly 650 people across mainland China and Hong Kong in 2002-2003.

Asian countries on Tuesday ramped up measures to block the spread of the new virus as the death toll in China rose to six, while US authorities confirmed the first case on American soil.

“The cost to the global economy can be quite staggering in negative GDP terms if this outbreak reaches epidemic proportions,” said AxiCorp analyst Stephen Innes in a note.

Innes added that should “things turn critical it could provide a massive blow to the airline industry and a knockout punch to local tourism.”

Tourism shares hit

Advertisement. Scroll to continue reading.

Tourism-linked shares plunged in Hong Kong, with Cathay Pacific losing more than four percent and casino operator Wynn Macau down 4.8 percent.

But in London, shares in EasyJet jumped 4.6 percent after the British no-frills airline said it expected to reduce losses in its first half after revenues grew following the collapse of tourism group Thomas Cook in late 2019.

US travel companies such as American Airlines and Booking Holdings also were under pressure, as major Wall Street indices pulled back from Friday’s records in the first session of the holiday-shortened week. US markets had been closed Monday for the Martin Luther King Jr holiday.

Boeing was the biggest loser in the Dow, dropping 3.4 percent after it announced it now does not expect the 737 MAX to return to the skies until mid-2020, later than some analysts expected.

The news halted trading in Boeing shares for a time, but it ended off the low point.

Key figures around 2130 GMT

New York – DOW: DOWN 0.5 percent at 29,196.04 (close)

New York – S&P 500: DOWN 0.3 percent at 3,320.79 (close)

New York – Nasdaq: DOWN 0.2 percent at 9,370.81 (close)

Advertisement. Scroll to continue reading.

London – FTSE 100: DOWN 0.5 percent at 7,610.70 (close)

Frankfurt – DAX 30: UP less than 0.1 at 13,555.87 (close)

Paris – CAC 40: DOWN 0.5 percent at 6,045.99 (close)

EURO STOXX 50: DOWN 0.3 percent at 3,789.12 (close)

Tokyo – Nikkei 225: DOWN 0.9 percent at 23,864.56 (close)

Hong Kong – Hang Seng: DOWN 2.8 percent at 27,985.33 (close)

Shanghai – Composite: DOWN 1.4 percent at 3,052.14 (close)

Euro/dollar: DOWN at $1.1086 from $1.1095 at 2200 GMT

Pound/dollar: UP at $1.3043 from $1.3010

Advertisement. Scroll to continue reading.

Euro/pound: DOWN at 84.99 pence from 85.28 pence

Dollar/yen: DOWN at 109.83 yen from 110.18 yen

Brent Crude: DOWN 0.9 percent at $64.59 per barrel

West Texas Intermediate: DOWN 0.3 percent at $58.34 per barrel

Click to comment
Advertisement

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Headlines

NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...

Kenya

NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...

Coronavirus

NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...

Coronavirus

NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...