Financial markets decline amid fears for China

  •   10/02/2020 - 16h16
  •   HARMANT Adeline

During this first session of the week, we have seen a further decline in the major European stock markets, even as the Chinese government announced a partial easing of measures against coronavirus and the reopening of some factories in China. Indeed, concerns still seem to occupy the minds of investors about a possible spread of the epidemic to the rest of the world.

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Financial markets decline amid fears for China

An update on the development of the various financial centres in Europe.

At the opening of this session on Monday, February 10, 2020, the Parisian stock market index CAC 40 fell by 0.59% with a quotation at 5,994.21 points. The FTSE 100 London Stock Index lost 0.24% while the German DAX 30 Index fell 0.49%.

As for the other European indices, the Eurostoxx 50 fell by 0.51%, the FTSEurofirst index lost 0.25% and the Stoxx 600 index lost 0.5%. The index had gained 3.32% of its value during the previous week, which represents its best performance in one week since November 2018.

 

The Chinese coronavirus still fuels fears:

There are now 908 deaths linked to the coronavirus and more than 40,000 cases of contagion according to the latest reports from Beijing. The balance sheet is therefore now higher than that achieved by SARS in 2003. However, the Chinese authorities have lifted some of the restrictions on business activity and travel in the country. It should also be noted that the economic and monetary authorities in this country continue to monitor the impact of the virus and some experts now believe that the government could consider lowering its interest rates to support the economy.

However, these various supposedly positive elements do not seem to reassure the markets. Indeed, some analysts believe that coronavirus is the main warning sign for most traders at the beginning of this week and that investors are worried about an increase in the number of deaths in China and the fact that employees cannot go back to work. The reopening of the factories raises fears of an increase in contamination and thus an increase in the epidemic.

The total cost of this coronavirus epidemic could reach, according to figures published by research firms, more than $280 billion to the world economy in the first quarter of this year 2020 alone.

However, we will retain the calm that reigned in the markets on Monday, but which will likely leave room for more agitation with the publications of Consumer Price Index on Thursday, Retail Sales on Friday for the United States, and the first estimate of growth for the fourth quarter in Germany and the rest of the Euro zone on Friday as well.