Coronavirus outbreak sees markets shaken
The coronavirus outbreak has disturbed financial markets around the world, following the city of Wuhan being put under lockdown to prevent the spread of the virus.
Four other cities alongside Wuhan have also been put under lockdown, preventing the movement of over 20 million people.
The lockdown coincides with the lunar new year celebrations this weekend, which sees the largest human migration in the world with 400 million people moving across the country to celebrate.
Trains, buses, and flights to and from the areas have all been cancelled.
There is widespread concern that the outbreak could significantly affect the market, much like the Sars outbreak in 2003 which resulted int he death of 774 people and damaged China’s rate of growth.
Markets in Hong Kong, Shanghai and Shenzhen were down by between two and three and a half per cent yesterday. Companies which focus on mining, such as Rio Tinto and Glencore, fared the worst with concerns that the need for materials and metals in China could decline.
On international markets the price of oil fell by three per cent, and luxury brands have also been damaged by the outbreak. China accounts for 35 per cent of the global income for European luxury brands, and in the past, the fortnight following the lunar new year has seen a spike in sales.
Tourism to China is also expected to be impacted by the virus’ outbreak if it is not contained.
Associate at Oxford University’s China Centre, George Magnus, said that the outbreak has come “at a very sensitive time for the Chinese economy. It looked as though at the end of 2019 the downturn in economic activity and unemployment had stabilised.
“The idea was that we would see a modest rise in economic growth in the first and second quarters of the year. That might not actually happen. It may cause stagnation around current levels of activity to continue.”