Global Sell-off Eases As Markets Track Spreading Virus

Financial markets rebounded outside Asia Tuesday following a global sell-off fuelled by a new deadly virus outbreak in China that could impact the global economy

London, (UrduPoint / Pakistan Point News - 28th Jan, 2020 ) :Financial markets rebounded outside Asia Tuesday following a global sell-off fuelled by a new deadly virus outbreak in China that could impact the global economy.

Europe's main stock markets were up around 0.5 percent in afternoon trading after shedding around 2.5 percent on Monday.

The Dow index in New York added 0.3 percent in early exchanges.

Tokyo extended its losses but Tuesday's drop was less steep at 0.6 percent.

The Dollar gained against most other major currencies, while oil prices were mixed.

"Calm has descended across global markets after yesterday's sell-off," said Neil Wilson, chief market analyst at Markets.com.

Markets remain "open to further falls if it becomes clear that infection is spreading more rapidly, but for now equity markets are entering a process of stabilisation", he added.

China on Tuesday urged citizens to postpone foreign travel to curb a viral outbreak that has killed 106 people, as the first cases of human-to-human contagion were detected abroad.

While traders have sought safety, for example buying into gold, oil tanked Monday on expectations that demand in China, the world's top consumer, will be hammered.

The outbreak comes during the Lunar New Year break when hundreds of millions of people criss-cross China and spend huge amounts of money.

Analysts said there were growing fears the crisis could become as bad as the SARS outbreak that rocked markets and the global economy 17 years ago.

The VIX "fear" index, which measures market volatility, soared by one quarter Monday to the highest level since October, when investors were worried about China-US trade talks.

The crisis comes just as the world economy showed signs of stability after a long-running growth slowdown.

"Given that China has rapidly increased its role in the global supply chains, the market continues to price in the worst case, negative growth shock scenarios," said AxiCorp's Stephen Innes.

"For the most part, traders are flying blind, knowing nothing about the actual implications of (the virus) for global growth," he said, adding "there remains a growing sense in the market that contagion levels could get worse before they get better".

- Key figures around 1430 GMT - London - FTSE 100: UP 0.5 percent at 7,452.00 points Frankfurt - DAX 30: UP 0.5 percent at 13,271.63 Paris - CAC 40: UP 0.6 percent at 5,895.80 EURO STOXX 50: UP 0.6 percent at 3,699.02 New York - DOW: UP 0.3 percent at 28,628.37 Tokyo - Nikkei 225: DOWN 0.6 percent at 23,215.71 (close) Seoul - Kospi: DOWN 3.1 percent at 2,175.77 (close) Hong Kong - Hang Seng: Closed for a public holiday Shanghai - Composite: Closed for a public holiday Dollar/yen: UP at 108.98 Yen from 108.90 yen at 2200 GMT Euro/dollar: DOWN at $1.1003 from $1.1019 Pound/dollar: DOWN at $1.2987 from $1.3057 Euro/pound: UP at 84.69 pence from 84.39 penceBrent Crude: DOWN 0.4 percent at $59.11 per barrelWest Texas Intermediate: UP 0.2 percent at $53.22