The effects of the coronavirus have infected European stock exchanges, which have awakened on Monday with falls due to fear of the advance of 2019-nCoV, or Wuhan virus – as it has also been baptized in reference to the Chinese city where the microorganism first jumped from an animal to a human being. This Monday the fear of the disease, which has already infected more than 2,700 people and killed 80, has jumped fully into the financial markets: the Spanish selective, Ibex 35, has started the day with a fall somewhat higher than 1.5%, somewhat less than their European peers. The CAC40 in Paris, the German Dax and the London FTSE suffered falls of more than 2%. The Chinese stock markets dodged the impact by remaining closed for the lunar new year holiday, but the Japanese Nikkei has also left more than 2%.
One of the sectors that has been directly seen most affected It has been the tourist. The IAG airline group (which includes British Airways, Iberia, Vueling and Air Lingus, among others) recorded losses this morning of about 6%, something similar to the travel agency on-line eDreams The hotel sector was not free from the panic of investors: Meliá Hoteles fell more than 5% and Amadeus, a provider of technology solutions for tourism companies, lost around 4%. The red color was repeated in other European companies in the sector: Easyjet suffered losses similar to those of IAG. Lufthansa, of more than 4.5%, while AirFrance lost almost 7%. The fear of the virus causes a decrease in the movements of travelers with Chinese origin or destination, which translates into a lower ticket sales and even the potential cancellation of flights.
The barrel of Brent crude, the benchmark in Europe, has fallen 2% on the same day and has marked a price of $ 59, compared to $ 64.92 to which it was sold a week ago, a change of almost 10% in this period. The blow embedded by the oil market also affects the currencies of some producing countries, such as Russia or Mexico.
Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has attributed the collapse to “psychological factors” to the media, and recalled that the 2003 SARS outbreak ultimately “did not cause a significant reduction in demand for Petroleum”. However, bearish pressures in the crude oil market have been powerful enough to compensate for the increase in uncertainty in the Middle East (after the attack on the US embassy in Baghdad), a factor that often causes increases in Texas and the Brent.
The rebound has also affected banks, metallurgical and oil companies, and has ended up spreading red to all the values of the Spanish Stock Exchange in the early stages of this Monday’s day. Acerinox fell more than 3%, ArcelorMittal, almost 4%. Sabadell, 1.5% and Bankia 1%. Repsol oil company lost 2.8% and Ence, dedicated to energy and cellulose, 4.7%.
The outbreak of the virus crown has originated in the city where the country’s main Chinese automobile and steel producers are, two key industries in the world’s second largest economic power. The city of Wuhan, located in the province of Hubei (center of the Asian giant), has also with the presence of more than 300 multinationals, hence fears have escalated as more information about the infection has been known. Meanwhile, investors keep an eye on Wednesday’s meeting of the Federal Reserve of the United States and the meeting of the Bank of England on Thursday – a day before the departure of the British country from the EU – the purchase of traditional products has skyrocketed. refuge assets such as gold or yen.
However, there are many countries that have already begun taking direct measures to stop the expansion of the coronavirus. Russian travel operators stopped selling flights to China this morning, said Dimitry Gorin, the vice president of the Association of Russian Tour Operators, according to the recommendations of the country’s regulator. Only the sale of return tickets was maintained at the moment.
Other countries have taken even more radical measures: Mongolia announced on Sunday the closure of all its border crossings with China, while the country originating the outbreak has begun to impose quarantine status in the main cities affected, affecting more than 50 million of people. Meanwhile, the European Union Health Safety Committee has met on Monday to decide the framework for action, after three cases have been diagnosed in France. The European Union Health Commissioner, Stella Kyriakides, said before the meeting that they were “ready to act and intensify our response if necessary.”
“It is too early to quantify the economic impact of the coronavirus, but when it comes to dealing with shocks Unexpected like this, the most reasonable approach seems to evaluate the precedents ”, explained in a statement the economic analyst of AXA Investment, Gilles Moëc, who recalled the episode of SARS in 2003, a virus of the same family that also originated in The Asian giant. “In this sense, the crisis caused by the SARS lowered China’s GDP by 1.1% and 2.5% that of Hong Kong, while only a 0.1% impact on the GDP of the US” , says the economist of AXA. Preliminary calculations by Standars & Poor’s coincide with this: the rating agency suggests that a 10% drop in the affected sectors would reduce the growth of the GDP of the Asian country by 1.2%.
However, the AXA Investment analyst recalls that since then the weight of China in the world economy has grown significantly, so the contagion in the world economy should probably be greater. While it should be stressed that at this time it is still too early to know if SARS and its economic effects constitute the correct precedent for evaluating the coronavirus. ” Moëc emphasized that “contacts between China and the rest of the world have skyrocketed in the last 15 years and the emergence of large-scale sources of contagion beyond the Greater China region would obviously change the equation.”