China virus fears rattle US shares, oil prices
New York: US shares and crude prices fell sharply on Friday as investors moved into safe-haven assets amid concerns that a spreading virus from China would curb travel and hurt economic demand.
MSCI’s gauge of stocks across the globe shed 0.41 per cent, weighed down by Wall Street as the benchmark S&P 500 logged its biggest one-day percentage drop since October 8.
Safe-haven assets like the Japanese yen and gold saw increases, while 10-year US treasury yields touched their lowest point in about three months.
US health officials confirmed a second US case of the new coronavirus, while China shut part of the Great Wall and suspended public transport in 10 cities as authorities sought to contain a virus that has killed 26 people and infected more than 800.
If concerns about a virus lead countries to close borders and restrict trade and travel, then that could have an impact on oil and an impact on global growth.- Willie Delwiche, investment strategist at Baird in Milwaukee
“Concern about the extent of this virus out of China is capturing people’s attention” said Willie Delwiche, investment strategist at Baird in Milwaukee.
“If concerns about a virus lead countries to close borders and restrict trade and travel, then that could have an impact on oil and an impact on global growth,” Delwiche said.
On Wall Street, the Dow Jones Industrial Average fell 170.36 points, or 0.58 per cent, to 28,989.73, the S&P 500 lost 30.07 points, or 0.90 per cent, to 3,295.47 and the Nasdaq Composite dropped 87.57 points, or 0.93 per cent, to 9,314.91.
The Nasdaq touched an intraday record high early in the session before falling.
Losses on the major US indexes were limited by an 8.1 per cent gain in Intel shares following the chip industry’s leader’s better-than-expected forecast.
European shares gained, with the STOXX 600 index rising 0.86 per cent, after some encouraging regional economic data.
A survey showed Germany’s private sector gained momentum in January as growth in services activity picked up and the pullback in manufacturing eased. British companies are enjoying their best month in more than a year, another survey showed.
“Sentiment among manufacturers is improving rapidly, meaning that expectations for a 2020 recovery are increasing,” ING economist Bert Colijn said of the Eurozone.
US Treasury yields continued their recent declines as the coronavirus uncertainty undermined risk appetite and spurred demand for safe-haven assets.
Benchmark 10-year notes last rose 15/32 in price to yield 1.6874 per cent, from 1.739 per cent late on Thursday.
The dollar index rose 0.17 per cent, with the euro down 0.22 per cent to $1.1028.
The Japanese yen strengthened 0.20 per cent versus the greenback at 109.29 per dollar.
Crude prices tumbled over 2 per cent and posted steep weekly declines.
US crude settled down 2.5 per cent at $54.19 per barrel, and Brent settled at $60.69, down 2.2 per cent.
Spot gold added 0.5 per cent to $1,570.99 an ounce.