Coronavirus fears hit global shares and oil price

Worries over the continued spread of the coronavirus have hit financial markets, with stocks from Wall Street to Tokyo declining.

The three main US indexes were down more than 1% at mid-day, while London’s FTSE 100 index ended almost 2.3% lower.

Firms with significant sales in China were among the hardest hit.

The coronavirus has killed 81 people in China with almost 3,000 confirmed ill, while at least 44 cases have been confirmed abroad.

The price of oil also fell, with Brent crude dropping 2.9% to $58.14 a barrel, as traders fear demand could drop if China’s economy stalls.

On Monday, shares across Europe saw big declines, with the German Dax and French Cac 40 indexes both down by more than 2.5%.

Luxury brands popular in China, including LVMH, Kering, L’Oreal and Hermes, all took hits, after seeing record high share prices in the past month.

In London, clothes maker Burberry, which makes about 16% of its sales in China, fell 4.79%. China is one of Burberry’s fastest-growing markets and has warned investors that a drop in Chinese spending could spell a decline in its own revenues.

In the US, Wynn Resorts, which runs casinos in Macau, was amongst the biggest losers, with shares down 6.5%. Las Vegas Sands, which also has a large operation there, slumped more than 5.6%.

Disney, which on Friday said it would close its Shanghai park, was down more than 2%, and travel companies were also affected.

Tommy Wu, senior economist at Oxford Economics, said any hit to the Chinese economy would probably be short-lived, hitting performance in the first three months of the year.

“We also expect the Chinese government to roll out measures to stabilise growth, if needed,” he said in a research note. Hong Kong, with its continuing pro-democracy protests, may suffer more, he said.

Source: BBC

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