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China’s stock market opens after an extended Lunar New Year
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Coronavirus gets worse
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Pound sterling takes a beating
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Better data from the US
Today China’s financial markets finally opened after a week off due to Chinese New Year celebrations. As many investors feared, Chinese stocks sank abruptly, almost 8% by the end of the day. The panic was inevitable as the global fear of fast-spreading virus was already seen on other stock markets last week. In face of rapid sell-off, the officials intervened in the money market by injecting some additional liquidity. Also, the ability of short-selling had been limited. Nevertheless, the session turned out to be the worst rout since August 2015 when the Chinese equity bubble burst.
As mentioned above, the fears of coronavirus are spreading all around the world as new cases have been discovered outside mainland China including US and Europe. Globally, the death toll increased by 57 reaching 362. As far as the number of infections is concerned, it climbed to 17 488 the last time it was reported. The virus will not only impact the Chinese economy, but also the global economy as a whole. The phenomenon is likely to be especially severe in South-East Asia due to strong economic relations with China.
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Create account Try a demo Download mobile app Download mobile appThe British pound fell more than 1% amid talks between the U.K. Prime Minister and EU officials. The meeting regarded the future trade deal. Boris Johnson officially stated that Britain will not seek an agreement at all cost and therefore will not accept the current standards.
Pound sterling took a serious beating today. GBP fell more than 1%. Source: xStation5As far as crucial macroeconomics data is concerned, investors were positively surprised by the US ISM data. The ISM Manufacturing rose to 50.9, exceeding the median projection of 48.5. The reading above the 50 level singal expansion. Having seen the results, markets took the message with optimism.
The upcoming week will demonstrate whether coronavirus will have further impact on global stock markets. On the other hand, the earnings season has not finished yet and investors are looking forward to dive into earnings reports of certain US companies. Furthermore, markets will closely pay attention to the core data from major global economies, for instance NFP report in the US.
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