Global shares hit as investors focus on coronavirus outbreak in prisons
A global stock rally was stopped in its tracks after new concerns flared that the coronavirus could spread significantly beyond the locked-down cities at the epicentre of the outbreak in China.
Stock markets across Asia, Europce, as well as the US, retreated by between 0.5% and 1%, and the price of Brent crude oil fell to $58.50, as investors were spooked by the outbreak of the deadly virus in Chinese prisons.
"The spread of coronavirus throughout two Chinese prisons provide another example of the dangers associated with controlling the spread of a virus in densely populated quarters such as a cruise ship or prison," said online broker IG.
"Unfortunately, what can happen in a prison or cruise ship could equally occur in factories, offices, or schools, highlighting the importance of further segregation despite the business impact of doing so," it said.
The new cases came at the end of a week in which a huge number of global corporates -- including large companies with significant bases in Ireland -- continued to count the financial costs of the outbreak on sales and profits.
Apple and its major Asian supplier Foxconn have said earlier this week that they have suffered from the disruption to factories and the drop in sales of Apple products in China, as Chinese shoppers stay at home in fear of contracting the virus.
But other companies, including long-haul;l airlines and freight shipping lines have also warned about the economic fallout across Asia and other regions.
Activity in both the manufacturing and services sectors stalled as companies have grown increasingly concerned about the coronavirus, a survey of purchasing managers showed.
The IHS Markit flash services sector Purchasing Managers’ Index dropped to the lowest level since October 2013 and signalled that a sector accounting for roughly two-thirds of the US economy was in contraction for the first time since 2016.
Data also showed Japan’s factory activity suffered its steepest contraction in seven years in February, underlining the risk of a recession there as the impact of the outbreak spreads.
With finance leaders from the Group of 20 major economies set to discuss risks to the world economy in Saudi Arabia at the weekend, the IMF said it was too early to tell what impact the virus would have on global growth.
In the US, a raft of disappointing earnings added to fears about the global impact of the coronavirus outbreak.
Heavyweights Microsoft, Amazon and Apple led US stocks lower for a second straight day.
