Global stocks plummeted at the close of trading before weekend on the back of broad-based losses amongst global markets due to concerns over the spread of the virus which emanated in China.
With one case having been reported in the USA, there are concerns that the virus could have an impact on the movement of consumer goods, and which will subsequently have an impact on economic growth. Stocks on the Shanghai slumped which saw the benchmark Shanghai Composite Index fall 3.1% while in Hong Kong, the Hang Seng lost 1.52%.
The Japanese Nikkei lost 0.98%. Losses in Europe were more moderate, but the main indices still tracked lower nonetheless. US equity market opened sharply lower as market participants shifted their focus from earnings releases.
Brent crude fell on the back of the virus concerns in today’s session as it was recorded trading 2.91% lower at $61.37 per barrel.
Meanwhile, S&P Global Ratings has said the virus sweeping across China could knock 1.2 percentage points off the growth rate of the world’s largest economy.
The SARS-like coronavirus has infected around 900 people and killed 26, prompting Chinese authorities to lock down a dozen cities and restrict the movements of 30 million people.
While the World Health Organization declined to categorise the outbreak as a global health emergency on Wednesday, analysts fear it could spread far and wide this weekend as hundreds of millions of people travel to celebrate Chinese New Year.
The International Monetary Fund currently expects China to grow 6% this year.
The S&P estimate, which assumes a 10% drop in consumer spending on discretionary goods and services such as transport and entertainment, suggests that could fall to 4.8%.
The Chinese economy already slowed to 6.1% growth last year, down from 6.6% growth in 2018.