The rebounding confidence seen last Friday was long gone this Monday, the markets seriously struggling as fears surrounding the coronavirus outbreak intensified.
From a bad start the European indices only got worse as the session went on, dealt an extra blow by a lower than forecast German Ifo business climate reading, one that served to undermine hopes of an economic turnaround in the country.
With Brent Crude down 2.2% and copper sliding 2.6%, the commodity-rich FTSE 100 had absolutely no chance. The UK index dropped 2.3%, rapidly sinking towards 7400, a level last seen exactly 6 weeks ago.
It was small comfort for the FTSE that it wasn’t alone. The DAX dropped 335 points, abandoning last week’s flirtation with all-time highs in favour of a 2 and a half week low of 13230. The CAC 40, meanwhile, slipped 2.5%, the French bourse dragged back under 5900.
On the surface it looked like the Dow Jones managed to avoid the kind of losses seen in Europe, instead falling a comparatively tame 1.4%. However, that 400-point plunge comes following the Dow’s late dive last Friday, after the European indices had locked up shop for the weekend.
The US index is now sitting the wrong side of 28600, that fortnight-plus nadir coming at the start of a week that sees Apple's (NASDAQ:AAPL) Q1 earnings, the latest statement from the Fed and the first glimpse at the USA’s Q4 GDP.
And that’s not all. Prior to the outbreak this week would have been notable for Mark Carney’s final meeting as Bank of England governor – an outing that could see the MPC cut interest rates – alongside the UK’s long-trailed withdrawal from the EU.
Instead it looks like those major macro events may end up as background noise to the market-tanking concerns surrounding the virus, and the potential impact it will have on the Chinese – and therefore global – economy.
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