Asia’s stock markets are falling heavily on fear of viruses

Concern for the virus outbreak’s impact on the economy is causing investors in Asia to escape stocks.

Asia’s stock markets are falling heavily on Monday over concerns about the economic impact of the virus outbreak that has spread from China to the rest of the world since January.

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An oil price collapse has intensified panic in financial markets, Reuters and AFP news agencies write.

From Sydney to Tokyo, stock markets on Monday are “a sea of ​​red”. In Japan and Australia, equity indices fall by about six percent, while South Korea and Singapore are down about three percent.

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Japanese export companies in particular have been hit hard because the Japanese currency, the yen, has strengthened against the US dollar.

The upturn for the yen was triggered by a sharp drop in crude oil prices of over 30 percent on Monday in Asia.

Oil price under pressure

Oil prices are under pressure from falling demand due to the outbreak of virus, and Saudi Arabia at the same time cut its official oil prices over the weekend.

In times of uncertain prospects for the world economy, it is popular among investors to buy yen, which is considered a “safe haven” in line with gold, for example.

– Investors are looking for safe havens as a result of accelerating cases of Covid-19 (viral disease, ed.) In Europe while Saudi Arabia is triggering a price war on oil. This is causing further panic in a market already preoccupied with fear, writes Stephen Innes, market strategist at financial house AxiCo, in a note Monday according to AFP.

In the US, there are also prospects of falling prices on Monday. According to CNN, the broad S&P 500 index stands to fall 4.9 percent from the opening.

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Report confirms

The virus outbreak shows no signs of slowing down, writes AFP. Over 100,000 people in nearly 100 countries are or have been infected, and globally the virus has caused over 3000 deaths. The majority of which are in China.

– You just don’t know how things will develop, says BIS Oxford Economics chief economist Sarah Hunter according to AFP.

– We see this with the wild fluctuations that are breaking through in the markets.

A report by the UN Trade and Development Agency, Unctad, confirms that the outbreak of viruses is hampering economic activity. Both trade, earnings and investment.

Where, before the outbreak of the virus, Unctad had expected a 5 percent increase in corporate foreign investment this year, Unctad now believes that this type of investment will fall to the lowest level since the 2008 financial crisis, Reuters writes.

The analysis is based on information from the world’s 5000 largest listed companies. On average, they have lowered expectations of earnings for the year by nine percent due to the virus outbreak.