Stock markets climb on easing economic concerns over coronavirus

AFP London, United Kingdom Feb 12, 2020, 07.21 PM(IST)

Stock information at a brokerage office Photograph:( Reuters )

Story highlights

While the death toll from China's coronavirus epidemic climbed past 1,100 on Wednesday, the number of new cases fell for a second straight day, raising hope the outbreak could peak later this month.

European and Asian stock markets climbed Wednesday following a positive overnight lead from Wall Street on easing investor concerns over the economic impact of COVID-19.

While the death toll from China's coronavirus epidemic climbed past 1,100 on Wednesday, the number of new cases fell for a second straight day, raising hope the outbreak could peak later this month.

US Federal Reserve Chairman Jerome Powell on Tuesday said its assessment of the economic fallout was not as gloomy as many had expected.

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There are meanwhile expectations that Beijing will introduce major stimulus policies to offset economic hits.

"It's now hoped that, as far as the economy is concerned, we're just facing a bad quarter that could wipe around 1.0 per cent of full-year Chinese growth," noted Craig Erlam, senior market analyst at OANDA Europe. 

COVID-19 that emerged in central China spooked equity and oil markets for weeks as it spread to more than two dozen countries.

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But with economic concerns easing, Brent crude oil rallied by two percent on Wednesday while safehaven investment gold retreated. 

"Gold is slowly losing its appeal as traders declare the end of COVID-19 in sight," said Erlam. 

"This may be premature but stock markets are at record highs and central banks appear relatively relaxed about the whole situation."

US planemaker Boeing however issued a stark warning Wednesday about the impact of the deadly coronavirus outbreak, saying there was "no question" it would hammer the aviation industry and the broader economy.

Major airlines have halted flights in and out of China, where a lockdown has been imposed in the worst-affected areas, while several countries have banned arrivals from China.

"You have several global airlines that have limited their traffic in and out of China, that's revenue," said Ihssane Mounir, the US plane maker's senior vice president of commercial global sales and marketing.