The current situation is far from being ideal as a coronavirus outbreak created a lot of problems for the global economy. Moreover, global stock markets fell for a seventh consecutive day on Friday due to the virus outbreak. Stocks around the world are struggling to deal with the situation.
It won’t be easy to convince the investors that everything is under control, based on recent results. On Friday, China’s Shanghai Composite fell more than 3.7%, bringing losses for the week to 5.6%.
It is important to mention that it is the worst performance since April 2019. Stock indexes across the region also declined on February 28. For example, Japan’s Nikkei 225 fell by 3.7%. Benchmark indexes in Australia and South Korea both fell 3.3%.
European stocks experienced even bigger problems. For example, Germany’s DAX dropped as much as 5% in early trading. Moreover, London’s FTSE 100 index also fell by 4.4%.
The benchmark FTSE MIB index also fell by nearly 4%. Italian authorities are trying to contain the virus outbreak.
Investors and stocks
Investors are closely monitoring the situation. In recent days, several famous companies warned that coronavirus is going to affect their businesses. The list includes AB Inbev, Disney, Apple, Microsoft, and Qualcomm.
The owner of British Airways and Chinese search giant Weibo joined the companies mentioned -above on Friday.
Moreover, if the coronavirus will become a global pandemic, the world economy will lose $1 trillion. Furthermore, it can trigger recessions in the United States as well as the Eurozone.
Ongoing a virus outbreak is a serious challenge for the stocks. It is not surprising because China is the main manufacturing hub in the world. The country’s economic problems have the potential to affect the stocks in the long run. The government in China took measures to counter this threat. However, it won’t be easy to solve this problem in the nearest future.
COMMENTS