Markets struggle after WHO declares virus emergency
London, Jan. 31 (AFP): Stock markets struggled Friday after the World Health Organisation declared a global health emergency over China’s spreading deadly virus.
With hours to go until Britain finally leaves the European Union, the London stock market sank 0.8 per cent in late morning deals as a relief rally for the pound hurt exporters.
Frankfurt and Paris shed 0.2 per cent and 0.4 per cent respectively around midday, after Asia was also gripped by virus worries in a volatile end to the week.
The novel coronavirus epidemic, which originated in the central Chinese city Wuhan, has so far killed 213 people and spread to at least 19 countries including two cases declared on Friday in Britain.
China’s National Health Commission meanwhile said nearly 10,000 people have been infected.
“Coronavirus is currently spreading six times faster than SARS.
Unless a cure is found, this could push a fragile world economic recovery into reverse,” warned Douglas McWilliams, deputy chairman at British research group the Centre for Economics and Business Research (CEBR).
He added: “It is clear that unless a cure and a vaccination are found rapidly, the fragile recovery that we predict is at risk. That is why — from an economics point of view — it is so vital that a cure and a vaccine is found.”
Separately, the EU’s official statistics agency announced Friday that the 19-member single currency area had already suffered a sharp slowdown after a turbulent year of Brexit uncertainty and trade spats with US President Donald Trump.
The eurozone economy grew 1.2 per cent over the year, down from 1.8 per cent in 2018 and well off the 2.7 per cent seen in 2017.
Meanwhile, the Geneva-based WHO invoked a global health emergency on coronavirus — but stopped short of recommending trade and travel restrictions that could have had a bruising effect on key global growth engine China.
“This is not a vote of no confidence in China,” WHO chief Tedros Adhanom Ghebreyesushe said, praising Beijing for its swift action to tackle the outbreak.
China has locked down a swathe of its centre, effectively quarantining millions of people in their cities and halting travel around the country.
“We must all act together now to limit further spread… We can only stop it together,” said Tedros, who travelled to China this week and met with President Xi Jinping.
Foreign airlines — including British Airways and Lufthansa — have begun cancelling or curtailing flights to and from China, and a number of governments are recommending citizens do not visit the country.
Investors initially applauded the WHO’s move, plunging back into markets that have lost altitude over recent days as the 2019-nCoV crisis has worsened.
“Coronavirus fears continue to remain a dominant driver of market sentiment, with the continued proliferation of the virus providing a huge cause for concern,” noted IG analyst Joshua Mahony.
“Growth fears remain relevant as the virus continues to spread,” he also warned.
World oil prices firmed Friday after plunging the previous day to three-month lows on virus-linked demand fears in China, which is a major market for raw materials including crude.