HONG KONG — Fears that a mysterious and fast-moving virus in China could impact the global economy drove investors in Asia and Europe to dump stocks on Thursday.
Money fled riskier assets like stocks and oil and flowed instead into investments that are considered safe havens like gold as growing numbers of policymakers, economists and corporate executives have sounded alarms. Major benchmarks across both regions fell by more than 1 percent. Wall Street also looked poised for a day of selling.
Early on, economists had speculated that China’s economy would not likely be as badly hit as it was during the 2002-2003 SARS epidemic. Some have now begun to revise their outlooks as more details emerge about the number of cases and speed of transmission of the coronavirus.
A growing number of companies have also warned they will have to close or shift operations and could take a financial hit from widespread business disruptions in China.
Stocks in Tokyo and Seoul closed down 1.7 percent, while in Hong Kong they fell 2.6 percent. China’s markets remain closed for an extended holiday until Feb. 3 but investors punished the stocks of Chinese companies listed in Hong Kong.
Traders in Taipei, returning from the Lunar New Year holiday, pushed the market down by 5.8 percent.
Brent crude oil, the international benchmark, hit its lowest price this year before paring some of its losses. It was trading at about $58.75 a barrel.
From Paris to London exchanges in Europen opened in the red, many trading down more than 1 percent.
Policymakers in Japan and the United States issued warnings about the potential impact of the virus on the economy. “There will clearly be implications,” said the Federal Reserve chair, Jerome H. Powell, on Wednesday. “We just have to see what the effect is globally.”
Earlier this week, a Japanese economy minister warned of the impact of the virus on exports and corporate profits.
“The risk of contagion is affecting economic activity and financial markets,” analysts at Moody’s Analytics wrote in an email to clients. “The immediate and most significant economic impact is in China but will reverberate globally, given the importance of China in global growth as well as in global company revenue.”
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January 30, 2020 at 03:03PM
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China’s Coronavirus Crisis Drives Asian Markets Lower - The New York Times
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