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Another day, another sell-off! World stock markets are sliding again today, as the coronavirus continues to spread around the world.
Fears of a global pandemic, and a sharp slowdown in economic growth, are raging through the markets — as investors fear that governments will fail to contain Covid-19.
European stock markets are expected to tumble sharply today, as the wave of selling accelerates.
Britain’s FTSE 100 is being called down another 1.5%, which would send it to a fresh 13-month low. That would also drive the Footsie into correction territory (more than 10% off its recent peak).
European markets are tipped to tumble by another 2%, with the futures market a sea of red again.
Asia-Pacific stocks have already slumped today, with Japan’s Nikkei shedding another 2% and South Korea down 1%. Australia’s S&P/ASX index has lost another 0.75%, as Canberra launches its coronavirus emergency plan.
Overnight, South Korea has reported a further 334 new cases of Covid-19, and China reported 433 new confirmed cases, and 29 deaths. The total death toll is nearly 3,000 people, with more than 82,000 infected.
Last night, Microsoft joined the ranks of firms warning that they’ll miss their financial targets – its personal computing supply chain has been disrupted.
Investors have not been reassured by Donald Trump’s attempts to get a grip on the situation. The US president put his deputy, Mike Pence, in charge of coronavirus response, and insisted America “very, very ready for this”.
In a rare trip to the White House briefing room, Trump declared:
The risk to the American people remains very low. We are ready to adapt and we are ready to do whatever we have to as the disease spreads, if it spreads.
There’s no reason to panic . . . this will end.”
Investors, though, are in a panicky mood. They’ve realised that company profits could be badly hit if firms can’t source products from China, or sell to their usual outlets.
Wall Street failed to rally last night, with the Dow closing lower — and it could suffer further falls today too.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says traders are also concerned that there are now more cases outside China than inside:
News spurred worries that the coronavirus is becoming a global threat and that containment measures elsewhere could further slowdown the global growth. Some European companies paused their business trips for the coming weeks and earnings forecasts are being pulled lower….
The slide we are seeing right now is not the correction of the recent stock rally, but the market’s understanding that the coronavirus outbreak would translate into significantly lower earnings and an anaemic global growth. If we add the fact that the crisis has only started outside China into the mix, there is a meaningful shift in stock valuations.
We’ll be tracking all the market action through the day….
- 10am GMT: Eurozone economic and consumer confidence figures for February
- 1.30pm GMT: US durable goods figures for January