A coronavirus outbreak was more dangerous than expected. She could not be kept in China, and now the virus continues to spread around the world. In this regard, concern is growing on stock exchanges and quotes are falling. Experts say markets will go even lower until the pace of the disease begins to stabilize.
Indices in Tokyo, Seoul, and Sydney are being adjusted along with US benchmarks.
World quotes fell even further on Friday due to growing concerns about the economic impact of the spread of coronavirus, which outbreaks were more serious than previously expected.
Japan’s Nikkei 225 Index, South Korean Kospi and Australian S & P / ASX 200 dropped by more than 3%, leading to adjustment of benchmarks that have fallen from a recent peak of at least 10%. On Thursday, US indices also entered the correction zone, as the fall in the market continued to intensify.
Hong Kong’s Hang Seng Index fell 2.7%, while Shanghai Shanghai Composite retreated 3.7%.
Over 82 thousand people became ill due to coronavirus worldwide and 2,800 died. The virus has been detected in at least 46 countries, as evidenced by the latest data from the World Health Organization. On Friday, China reported 327 new infections, the lowest since January 23, as well as 44 deaths.
“Under the baseline scenario, the outbreak was supposed to be held back in China, and the peak should have been at the end of the first quarter of 2020,” said Paul Chew, head of research at Singapore-based Phillip Securities.
“But now, when the disease outside of China is spreading even faster, and American companies are beginning to warn of loss of profits due to this outbreak, the market is overestimating quotes due to the seriousness of the epidemic,” he said. According to Chu, markets will go even lower until the pace of the disease begins to stabilize.
S&P 500 futures in transactions after the close of the exchange fell by 1.4%, indicating that with the opening of American markets on Friday, a further decline is possible. On Thursday, the largest daily drop in this indicator since August 2011 was noted. The index entered the adjustment zone from its highest value in just six days of trading, dropping 12% from its peak reached on February 19.
Recent events in the Asia-Pacific region have brought new losses to the sell-off process, due to which stock market securities have lost trillions of dollars since last week.
For example, the FTSE All World index for six days of a continuous decline fell by almost 10%. According to the Refinitiv Datastream platform, its market value has decreased by about 5.2 trillion dollars to 47.1 trillion.
Stocks in the commodities, energy, transportation and financial sectors were hit hardest by worries about the economic downturn, travel bans and disruptions in the global supply chain.
This year, PetroChina shares on the Hong Kong Stock Exchange fell 22%, and HSBC Holdings and HSBC Holdings and Industrial & Commercial Bank of China ), which is the largest in the country, fell 11%. Shares of the mining giant BHP on the Sydney Exchange on Friday also went down, and their losses since the beginning of the year amounted to more than 13%.
Reflecting concerns about mineral demand was a further drop in oil prices, which were hit by new pressures on Friday. Mark Brent, the world benchmark, lost 2.7% in price, dropping to $ 50.78 per barrel, according to Futuresource research firm.
Shares of Internet and healthcare companies are resisting the general trend. Quotes of the Chinese online gaming giant Tencent fell by 3% on Friday, but year-on-year, they still rose by the same 3%.
In other markets, strong demand for reliable assets remains. Gold prices did not change significantly, dropping 0.1% to $ 1,640 per troy ounce. The yield on US Treasury bonds with a 10-year maturity in recent days has fallen to a record low and reached 1.251%.
Working in Hong Kong at Kim Eng Securities and dealing with regional strategy issues, Willie Chan said that Asian markets have already included potential risks for profit in the first quarter. According to him, it is too early to make forecasts about whether the virus will kill the summer heat or not, but pent-up demand may well recover.