Traders work on the floor of the New York Stock Exchange in New York City. AFP
Asian stock markets slumped on Tuesday as a SARS-like virus taking hold in China spooked investors, while sentiment suffered a knock also from a credit-ratings downgrade to major financial hub Hong Kong.
Most European and US markets followed Asia lower after Hong Kong slumped 2.8 per cent by the close and Shanghai ended with a loss of 1.4 per cent.
Moody's has lowered its credit rating on Hong Kong, which has likely fallen into recession owing to the unrest as well as the China-US trade war.
AJ Bell investment director Russ Mould attributed the weakness in stock markets in Asia and beyond to "reports the deadly virus has spread to neighboring countries, with all the potential economic disruption that could cause."
Analysts also cited a muted forecast from the International Monetary Fund, which cut the global growth estimate for 2020 to 3.3 per cent, 0.1 percentage point lower than in the prior report released in October, noting an improvement in the US-China trade picture but pointing to weakness in India.
The new coronavirus strain has caused alarm because of its connection to Severe Acute Respiratory Syndrome (SARS), which killed nearly 650 people across mainland China and Hong Kong in 2002-2003.
Asian countries on Tuesday ramped up measures to block the spread of the new virus as the death toll in China rose to six, while US authorities confirmed the first case on American soil.
"The cost to the global economy can be quite staggering in negative GDP terms if this outbreak reaches epidemic proportions," said AxiCorp analyst Stephen Innes in a note.
Innes added that should "things turn critical it could provide a massive blow to the airline industry and a knockout punch to local tourism."
Tourism shares hit
Tourism-linked shares plunged in Hong Kong, with Cathay Pacific losing more than four per cent and casino operator Wynn Macau down 4.8 per cent.
But in London, shares in EasyJet jumped 4.6 per cent after the British no-frills airline said it expected to reduce losses in its first half after revenues grew following the collapse of tourism group Thomas Cook in late 2019.
US travel companies such as American Airlines and Booking Holdings also were under pressure, as major Wall Street indices pulled back from Friday's records in the first session of the holiday-shortened week. US markets had been closed Monday for the Martin Luther King Jr holiday.
Boeing was the biggest loser in the Dow, dropping 3.4 per cent after it announced it now does not expect the 737 MAX to return to the skies until mid-2020, later than some analysts expected.
The news halted trading in Boeing shares for a time, but it ended off the low point.Agence France-Presse
More than 570 people have been infected with the coronavirus across China and Wuhan, the city at the centre of the outbreak, has been placed under effective quarantine.
The company has hundreds of retail stores worldwide, including 42 in China that closed or operated with reduced hours at the height of the country's outbreak.
Markets in Hong Kong, Taiwan and mainland China were closed Tuesday for Lunar New Year holidays, while South Korea's benchmark tumbled 3.1% to 2,176.72 as it reopened after its own holidays.
The Wuhan Institute of Virology has collected extensive virus samples, leading to unproven allegations that it may have caused the original outbreak by leaking the virus into the surrounding community. China has strongly denied that possibility and has promoted unproven theories
Pakistan’s central bank raised its key policy rate by 100 basis points to 16% on Friday in an unexpected move to ensure high inflation does not get entrenched.
Retailers unveiled a trove of fresh seasonal promotions on Friday, as they try to coax sales from reticent shoppers whose holiday cheer has been tempered by inflation and worries over a softening economy.
The real estate and properties transactions valued at Dhs15 billion in total during the week ending 25 November 2022. The sum of transactions was 2,867.