Health concerns dominate FTSE trade
Fiona Cincotta January 27, 2020 9:56 AM
The FTSE and all other European gauges are in the red this morning, unable to shrug off the effect of China’s spreading coronavirus epidemic, which has claimed more lives over the weekend and has reached Europe and the US. When Wall Street opens later today it is unlikely to be exempt from health fears; US stock futures are already indicating a weaker start to the day.
Pieces of information around the virus are beginning to form a fuller picture. The incubation of the illness which manifests like a mild pneumonia can be up to two weeks, which would explain why Chinese authorities blocked off the most infectious cities fairly quickly. Crucially, the timing of the outbreak will make it harder to contain than at any other point during the year because there is a massive spike in the number of travellers during the week of the Chinese New Year across the country.
Miners, airlines worst hit, safe havens sought
On the FTSE the same companies are being hit by the virus as last week. Mining companies, luxury goods firm Burberry and airlines are carrying the brunt of the selloffs on concerns that the coronavirus may start affecting Chinese imports and parts of the country’s economy. Instead safe havens like the yen and gold are pulling in investors.
Oil falls below $58
Crude oil ended up among the worst hit assets with Brent crude losing 3.2% after the initial bout of selling sparked heavy stop loss selling. Brent crude is now trading below $58, the lowest level in a month and WTI at $52.4, the lowest point since October.
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