Global stocks slide as virus fear escalates

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Equities tumble as the death toll from a virus spreading in China rises, forcing airlines to cut flights and stores to close

Traders at the New York Stock Exchange on January 29 2020 in New York City, the US. Picture: AFP/JOHANNES EISELEStocks across the world tumbled on Thursday as the death toll from a virus spreading in China reached 170, forcing airlines to cut flights and stores to close as the potential economic hit from the outbreak came into focus.

Adding to the gloom, disappointing earnings and trading updates weighed further on blue-chip stocks. Royal Dutch Shell fell 4.8% after fourth-quarter profit halved to its lowest in more than three years.The number of confirmed deaths from the virus in China has climbed to 170 with 7,711 people infected, and more cases are being reported around the world.

Investment banks also started to put figures on what the damage could be. Citi has said it expects China’s 2020 growth to slow to 5.5%, after previously predicting it to be 5.8%, with the sharpest slowdown this quarter.“The economic impact will be determined by the extent to which it spreads,” said Michael Bell, global market strategist at JPMorgan Asset Management, adding that hard evidence of a hit to economic data was needed before the effect of the virus could be judged.

“There is some concern about tonight’s presser by the WHO. The fear is that they might raise the alarm bells ... so people are taking money off the table,” said Chris Weston, head of research at Melbourne brokerage Pepperstone. In Europe, the pound hovered around a one-week low hit on Wednesday ahead of Bank of England governor Mark Carney’s final policy vote, where the central bank appears close to cutting rates for the first time in more than three years.

 

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