World markets are starting to assess new risks amid the breakout of the new coronavirus (2019-nCoV) in China. Markets fear the decease could quickly become worldwide that would mean restriction in traveling, goods production and exports as well as consumption. Investors are reminded previous SARS virus outbreak in the same Chinese province in 2002-2003 led to $59 billion losses, according to Asian development bank.
Fears made risky assets much less attractive and led to a decline on the emerging markets to December 2019 lows. Shanghai composite dropped to 2950 on Jan. 24 from 3096 recorded at the beginning of this week. Brent weakened to $61.3 on Friday afternoon from $65.7 a barrel. Such harsh drop could be rather emotional while China and other countries are now better prepared to counter such deceases with all their expertise in decease control. China and other affected countries are taking swift actions to prevent further spread of the virus. World Health Organization (WHO) said it's too early to declare an international public health emergency albeit called for every country should be prepared to deal with cases of the virus. No additional restrictions on travel and trade by WHO were made.
Some soothing returned on the markets ahead of the US market opening with the VIX index in the US at rather comfortable values of 12.8, a level where risks are considered appropriate. Nikkei suspended its decline closing at 23,827.18, or 0.13% up.
If countries will succeed in preventing virus to spread any further it would mitigate the risk and restore investors' appetite for exposure. That will support emerging markets.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
Indiscriminate reliance on illustrative or informational materials may lead to losses.
© 2000-2021. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at firstname.lastname@example.org.