It is official: the coronavirus is now spreading in Europe. Previously, it became clear that Italy is significantly affected, with over 300 cases of the virus so far. Now there have also been new cases confirmed in Germany, Austria, Switzerland, Croatia, France, Greece, and Spain. Due to the open nature of the European Union, where people travel freely from one member state into another, many fear the virus will spread quickly, especially considering that infected patients might not show symptoms for close to a month and not realize they are sick and contagious.
As a result, European markets all suffered a blow. Stoxx 600 dropped more than 1% as European companies are issuing warnings of drops in production. German bond yields also declined.
The markets are also marking losses in Hong Kong, despite the government’s stimulus package that was announced today. The city is affected by the coronavirus as well, but more than that, its economy was already suffering due to the prolonged protests of 2019.
The case is similar in South Korea, with the KOSPI index dropping another 1.3% on yet another rise in the number of people with the Covid-19 virus. With over 1,200 infected patients, South Korea is the second most-affected country after China.
Even markets in the United States are under-performing. The Dow 30 and Nasdaq 100 are both down today. The US dollar has retreated from the three-year high it reached against the euro previously.
Oil prices, affected by an expected drop in demand, are slumping lower and lower, with the WTI brand dropping below $50 per barrel. On the other hand, gold is steadily gaining value in the current market conditions.
