Global Stocks Drop, China Falls to Eight Month Low Following Coronavirus Epidemic
Global shares dropped Thursday, led by the biggest plunge in Chinese shares over eight months, as concern raised about the spread of a deadly coronavirus in China.
With hundreds of thousands of Chinese preparing to travel for the Lunar New Year, the potential the disease to spread, together with the tendency of traders to reduce their exposure before holidays, left markets striving.
Safe options including Japan’s yen and government bonds surged, while European shares followed Asia lower. The risk of airline travel and a rise in supply drove oil prices to seven-week lows.
The Swiss franc climbed to a near three-year high against the euro in a single day CHF; nevertheless, it was trading little changed as the focus in Europe turned to its central banks.
Norway’s central bank had already left its rates of interest firm. The European Central Bank (ECB) holds its first meeting of the year later on Thursday, where it’s anticipated to outline its first formal policy review in 17 years.
It will most likely last for most of the year and span topics from the inflation goal to digital money and the struggle against the climate crisis.
As the virus took hold, MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 1.07%. Chinese stocks contracted 3.1%, the biggest daily drop since May when U.S. Prez Trump’s threats of further tariffs on Chinese items moved financial markets.
Among leading currencies, the Chinese yuan dropped to a two-week low, on course for its worst week since August.