LONDON, Feb 20 — Coronavirus fears weighed on global stock markets today as investors took profits despite China reporting a big drop in new cases and easing borrowing costs to cushion the epidemic’s economic impact.
Traders have been betting on central banks doing what it takes to keep their economies chugging along as the new coronavirus hits corporate earnings and economic growth.
“Coronavirus uneasiness is lingering as cases continue to spread beyond China, though China did report more stimulus measures and some favourable economic data,” said analysts at the Charles Schwab brokerage.
The People’s Bank of China (PBoC) lowered its one-year and five-year loan prime rates, but the moves were “not nearly enough”, said Stephen Innes of AxiCorp.
“The PBoC needs to exceed the market expectations, not hit them in this environment,” he said.
The bank’s actions still helped the Shanghai stock market reach a 1.8 per cent closing gain.
In the best-case scenario, the economic hit from the epidemic in China will be short-lived, but it comes as the global economy remains fragile, IMF chief Kristalina Georgieva said yesterday.
Wall Street ran into profit-taking after record highs yesterday, while European stock markets were also mildly lower.
London, however, managed small gains as a weakening pound gave a fillip to stock prices in the export sector.
Air France-KLM shares plunged nearly three per cent after the airline reported that the coronavirus had blown a large hole in 2020 earnings to date while separately unveiling lower profits for 2019.
Oil prices rebounded as hopes spread that the impact of the virus on economic growth, and therefore crude demand, will be limited.
But gold, a popular safe-haven investment, continued firm after reaching a seven-year high on Wednesday.
Key figures around 1435 GMT
London — FTSE 100: UP 0.1 per cent at 7,464.50 points
Frankfurt — DAX 30: DOWN 0.3 per cent at 13,748.89
Paris — CAC 40: DOWN 0.2 per cent at 6,096.97
EURO STOXX 50: DOWN 0.4 per cent at 3,849.52
New York — Dow: DOWN 0.2 per cent to 29,301.16
Tokyo — Nikkei 225: UP 0.3 per cent at 23,479.15 (close)
Shanghai — Composite: UP 1.8 per cent at 3,030.15 (close)
Hong Kong — Hang Seng: DOWN 0.2 per cent at 27,609.16 (close)
Euro/dollar: UP at US$1.0815 from US$1.0805 at 2200 GMT
Pound/dollar: DOWN at US$1.2861 from US$1.2920
Euro/pound: UP at 84.05 pence from 83.63
Dollar/yen: UP at 112.10 from 111.37
Brent Crude: UP 0.6 per cent at US$59.48 per barrel
West Texas Intermediate: UP 1.1 per cent at US$54.07 — AFP
