Europe stocks post worst day since Brexit, wiping out 2020 gains Thu, 27 Feb 2020 08:54:01 +0200
European equities haven’t had such a bad day since the aftermath of the Brexit vote more than three years ago as increasing concerns over the economic impact of the coronavirus hurt travel and luxury sectors, and volatility spiked.
The JSE plummeted along with global stocks as heightened fears over the spread of the coronavirus outside of China escalated.
The all-share index eventually closed weaker on Tuesday following a mixed session in which the local bourse swung between gains and losses.
It is becoming more apparent that some economies and companies will be severely impacted due to the loss of productivity caused by the quarantining of people
The JSE had managed to get off to a firmer start before the declines in Europe weighed in the afternoon session.
Stocks in Europe were buoyant with gains being recorded across all the major indices, while US stocks also managed to open firmer.
Weakness was not only limited to the local bourse as global markets also retreated on the back of concerns that the coronavirus would have much bigger impact on global growth
The rand plummeted in the afternoon session after Moody’s lowered South Africa’s GDP forecast to 0.7% from 1%
The outlook was mixed in most global markets starting off in Asia where the Hang Seng and Shanghai Composite Index gained 0.31% and 0.7% respectively, while the Nikkei shed 0.59%.
The local currency is heading for its best weekly performance this year.
The US Fed has indicated that it is closely assessing the potential impact to growth that could stem from the epidemic, while in China measures such as reserve requirement cuts have been taken to bump up liquidity in the markets.
The JSE opened mildly firmer and climbed further as the session progressed. The surge started off in Asia where the Shanghai Composite Index gained 0.81%, the Hang Seng added 0.87% while the Nikkei rose 0.74%.
The sea-saw action in financial markets continues despite the ongoing risks associated with the coronavirus. The gains in today’s session seem to have been triggered by another record high trading session in the USA on Monday.
Investors continued to assess the impact of the coronavirus particularly to global growth with most sectors taking a rather cautious approach. There are still broader concerns over the spread of the virus and how prepared health authorities are to contain it.
WHO Director-General Tedros Adhanom Ghebreyesus has voiced concern over the spread of the coronavirus from people with no travel history to China.
The gap in supply left by SAA planning to cancel a number of routes and reduce some frequencies, could mean increased airfares for consumers, warns an aviation expert.
South Africa will increase tariffs on poultry imports from the U.S. and Brazil, handing a boost to local producers who have called for fresh measures to counter the dumping of cheap overseas chicken.
The JSE closed softer on Friday in line with global markets which retreated despite robust US jobs numbers.
Emerging markets are coming under pressure due to concerns over the economic impact of coronavirus, says Bianca Botes of Peregrine Treasury Solutions.
The JSE closed mildly firmer on Thursday as markets remained buoyant following significant gains over the past two sessions.