· Wall Street falls as China virus reaches the U.S.
Wall Street lost ground on Tuesday, backing away from record highs as a viral outbreak from China found its way to U.S. shores and the International Monetary Fund (IMF) lowered its global economic growth forecast.
All three major U.S. stock averages fell following several days of record closing highs and their best one-week advance in months.
The indexes extended their losses after the Centers for Disease Control and Prevention confirmed the first U.S. case of the coronavirus, which has now killed six people in China.
In other news, the IMF trimmed its global economic growth forecasts for 2020 and 2021, with Managing Director Kristalina Georgiev citing lasting effects from the bruising U.S.-China trade war and sharper-than-expected slowdowns in India and other emerging markets.
The Dow Jones Industrial Average .DJI fell 152.06 points, or 0.52%, to 29,196.04, the S&P 500 .SPX lost 8.82 points, or 0.26%, to 3,320.8 and the Nasdaq Composite .IXIC dropped 18.14 points, or 0.19%, to 9,370.81.
· “We’re seeing headline risk introduced to the market and any time there’s new uncertainties, we see more volatility and flight to quality and investors fleeing risk assets,” said Charlie Ripley, senior market strategist for Allianz Investment Management in Minneapolis.
“Today’s news around the coronavirus is a reminder that risks remain, and it’s something that investors will be paying attention to in the coming weeks and months,” Ripley added.
With the outbreak occurring just before the Chinese lunar new year, the news hit travel-related stocks the hardest.
· Hong Kong falls more than 2%, leading losses among major markets following Moody’s downgrade
Stocks in Hong Kong led losses regionally among major Asian markets on Tuesday after ratings agency Moody’s cut its rating for the city to Aa3 from Aa2 on Monday.
The Hang Seng index in the city fell 2.67%, as of its final hour of trading, with shares of life insurer AIA plunging beyond 3%.
Chinese tech behemoth Tencent also dropped 2.88%, after the firm’s Chairman Pony Ma reportedly sold $2 billion Hong Kong dollars (approx. $257.31 million) worth of shares, according to Reuters.
· Asia stocks subdued amid heightened concerns over coronavirus
Stocks in Asia were little changed in Wednesday morning trade amid heightened concerns over the spread of the coronavirus that has killed 6 in China so far.
The Nikkei 225 was largely flat in early trade, as shares of index heavyweight Fast Retailing fell 1.29%. The Topix index dipped slightly.
The Kospi in South Korea hovered around the flatline. The Bank of Korea said Wednesday the country’s economy grew 1.2% on a seasonally adjusted basis in the fourth quarter as compared with three months earlier. That was the fastest expansion since the third quarter of 2017, beating an estimated 0.8% growth from a Reuters poll.
Meanwhile, stocks in Australia rose in morning trade, with the S&P/ASX 200 adding 0.3%.
Overall, the MSCI Asia ex-Japan index was largely flat.
Reference: CNBC, Reuters
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