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Stocks Drop as U.S. Finds Case With Unknown Origin

Thursday 27th February 2020

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Stocks in Asia retreated along with U.S. equity futures after U.S. health authorities said they found the first case of coronavirus that does not have ties to a known outbreak.

The news came as President Donald Trump said Americans face little risk from the outbreak, comments that failed to assuage concerns as investors try to gauge the risk that the epidemic poses to the world’s largest economy. Japanese shares were down more than 1.5%, with shares in Seoul, Hong Kong and Sydney more modestly lower. Shanghai shares edged up at the open. Crude oil retreated again, and 10-year Treasury yields are near the record lows hit Tuesday.

Global stocks are narrowing a gap with economic data after recent sell-off

The won erased gains after the U.S. urged travelers to reconsider trips to South Korea as the number of cases there rose above 1,500. The currency had climbed when the Bank of Korea unexpectedly kept interest rates on hold earlier Thursday.

Microsoft Corp. fell in after-hours trading after saying the virus continues to impact its supply chain in China. The Aussie hit a fresh 11-year low.

“We continue to keep an eye on contagion to new regions and new containment measures that could add to growth fears, especially in Europe or the U.S.,” said Esty Dwek, head of global market strategy at Natixis Investment Managers. “We had reduced our allocation to equities in anticipation of higher volatility and we believe this is likely to continue.”

(Bloomberg)



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