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World Stocks Follow Wall Street Lower 02/21 05:18
World Stocks Follow Wall Street Lower 02/21 05:18
Global stock markets followed Wall Street lower Friday after a spike in new
virus cases in South Korea refueled investor anxiety about China's disease
BEIJING (AP) -- Global stock markets followed Wall Street lower Friday after
a spike in new virus cases in South Korea refueled investor anxiety about
China's disease outbreak.
Benchmarks in Tokyo, Hong Kong and Sydney retreated and London and Frankfurt
opened lower. Shanghai advanced.
Traders shifted money into bonds and gold, a traditional safe haven.
Bond markets are "sounding a warning on global growth" as virus fears spread
to South Korea, Singapore and other economies, DBS analysts said in a report.
Markets had been gaining on hopes the outbreak that began in central China
might be under control following government controls that shut down much of the
world's second-largest economy. Sentiment was buoyed by stronger-than-expected
U.S. economic data and rate cuts by China and other Asian central banks to
blunt the economic impact.
But investors were jarred by South Korea's report of 52 new cases of the
coronavirus, raising its total to 156, most of them since Wednesday. That
renewed concern the infection is spreading in South Korea, Singapore and other
In early trading, the FTSE 100 in London sank 0.5% to 7,402.58 and
Frankfurt's DAX lost 0.4% to 13,606.41. France's CAC 40 tumbled 0.6% to
On Wall Street, the future for the benchmark S&P 500 index retreated 0.4%
and that for the Dow Jones Industrial Average lost 0.5%.
In Asia, Tokyo's Nikkei 225 declined 0.4% to 23,386.74 and Hong Kong's Hang
Seng sank 1.1% to 27,308.81. In Seoul, the Kospi lost 1.5% to 2,162.84.
The Shanghai Composite Index bucked the regional trend, climbing 0.3% to
The S&P-ASX 200 in Sydney lost 0.3% to 7,139.00. New Zealand advanced while
Southeast Asian markets declined.
On Thursday, the S&P 500 index lost 0.4% after being down as much as 1.3% at
one point. The Dow fell 0.4%.
Gold touched its highest price since early 2013, gaining $14.50 to
$1.634.30. The 10-year Treasury's yield sank to 1.49% from 1.57% late
Yields on 30-year U.S. Treasuries are below 2%, a level last seen in
September "when U.S.-China trade fears were acute," said the DBS analysts.
A pickup in economic activity "is still elusive," despite a decline in
numbers of new Chinese cases, they wrote.
China reported 118 deaths and 889 new cases in the 24 hours through midnight
That raised the death toll to 2,236 since December and total cases to 75,465.
The number of new cases reported each day has been declining but changes in
how Chinese authorities count infections have raised doubts about the true
trajectory of the epidemic.
The Korea Centers for Disease Control and Prevention said 41 of the new 52
cases were in the southeastern city of Daegu and the surrounding region.
South Korea's government declared the area a "special management zone"
Friday. The mayor of Daegu urged the city's 2.5 million people to stay home and
wear masks even indoors if possible.
Also Friday, a measure of Japan's manufacturing activity tumbled to an
eight-year low and a companion gauge of service industries dropped even more
The preliminary purchasing managers' index for February declined to 47.7
from the previous month's 48.8 on a 100-point scale on which numbers below 50
show activity contracting. The preliminary services PMI plunged to 46.4 from
The decline "underlines that the coronavirus has started to weaken
activity," Marcel Thieliant of Capital Economics said in a report.
To contain the disease, China starting in late January cut off most access
to Wuhan, the central city where the first cases occurred, and extended the
Lunar New Year holiday to keep factories and offices closed and workers at home.
Some Chinese factories and other businesses are reopening but restrictions
that in some areas allow only one member of a household out each day still are
in place. Forecasters say auto manufacturing and other industries won't return
to normal until at least mid-March.
A rise in new cases in Beijing, the capital, "raises alarm" because it
suggests major Chinese cities "may be under pressure to contain the virus
amidst returning workers" as companies reopen, Mizuho Bank said in a report.
A growing number of companies say they expect to suffer losses due to the
The world's largest shipping company, Denmark's A.P. Moller Maersk, said
Thursday it expects a weak start to the year. Air France said the disease could
mean a hit of up to 200 million euros ($220 million) for its results from
February to April.
The worries overshadowed encouraging data on the U.S. economy.
A survey of manufacturers in the mid-Atlantic region jumped to its highest
level since February 2017. A separate report showed leading economic indicators
in the United States rose more in January than economists forecast. The number
of workers applying for jobless claims rose but stayed low.
ENERGY: Benchmark U.S. crude lost 75 cents to $53.13 per barrel in
electronic trading on the New York Mercantile Exchange. The contract rose 49
cents on Thursday to settle at $53.78. Brent crude oil, the international
standard, lost 90 cents to $58.41 per barrel in London. It rose 19 cents the
previous session to $59.31 per barrel.
CURRENCY: The dollar declined to 111.72 yen from Thursday's 112.09 yen. The
euro rose to $1.0815 from $1.0790.