“Global markets have started the week in poor form as more cases of the coronavirus are being reported across the world, which has led to more fears about the prospects for global growth and global trade….
By Mihir Kapadia, the CEO of Sun Global Investments
Asia ended Monday with indices trading lower across the board with Asia-Pacific shares outside Japan at their lowest since early February.
The South Korean KOSPI was the most notable victim as it slumped 3.9% following a high alert call by the government with now more than 763 infections being reported and seven deaths. Australia and New Zealand also struggled as their index’s slid 2.25% and 1.8% respectively, which implies that markets will struggle to end positively this week.
Europe has followed suit and started the day on the backfoot, with Italy diving 4% following more coronavirus cases being reported, while both Frankfurt and Paris were down 3% and the London FTSE fell 2.5% as investors fear that the virus is gathering more momentum. Across the pond, the Dow Jones Industrial Average futures is expected to plunge 700 points at market open later today.
It appears that despite measures being taken by China and other nations, the overwhelming fear amongst markets is that the virus is still spreading, and with no concrete solutions in place to contain it, looks set to get worse as the week progresses. As a result, we could expect safe havens to continue their rise with gold, which has reached seven-year highs, likely to remain higher for the rest of the month. The Dollar and US Treasury Bonds are also higher. Stocks will remain under pressure until the outbreak peaks.”
Source : ETFWorld.co.uk