Asian markets reopen to losses after Chinese New Year over Coronavirus fears
Liam Sheasby, News Editor
3 Feb 2020, 1:05 p.m.
China’s Shanghai Composite index registered a loss of 7.72% today (-229.82 points) as fears over the rapidly spreading Coronavirus were finally reflected on the previously-closed Asian markets. Japan’s Nikkei 225 fell by 1.01% (-233.24 points), while Taiwan’s TSEC 50 index dropped by 1.22% (-140.18 points).
With China the origin of the outbreak, much of the country is operating in a limited capacity while the government and medical professionals try and isolate those infected with the virus and minimise both its spread and its impact on the population. Neighbouring nations have taken similar precautions with regards public transport restrictions and health checks.
Investors are wary of backing markets – especially Chinese ones – in the face of reduced operations. With business effectively on hold, many investors see little point in putting money into the system. Instead, safe havens like gold, the Swiss Franc, and government bonds have seen a growth in demand.
On Friday, the US stock markets reported their own significant losses, with the biggest weekly loss and biggest monthly loss combining. Delta and American Airlines both suspended flights between the US and China, leading the way for a stock market rout. The Dow Jones had its worst performance since last August, with a loss of 2.09% or 603.41 points. The broader S&P 500 lost 1.77% (58.14 points), while the tech-heavy Nasdaq lost 1.59% (148 points).
In Europe, the FTSE 100 lost 1.3% on Friday, while the European STOXX 600 fared a little better at -1%. Today’s trading has the FTSE in the green, up by 0.4%, though these gains can be attributed to the falling Pound. Sterling is down at present due to fears over a no-deal Brexit following cautious warnings from the government about this year’s transition period and the trade negotiations that will be ongoing.