Coronavirus spreads in China prisons, Korean church as fears weigh on global markets

Reuters Beijing Feb 22, 2020, 08.07 AM(IST)

File photo. Photograph:( AFP )

Story highlights

A total of 234 infections among Chinese prisoners outside Hubei ended 16 straight days of declines in new mainland cases. Another 271 cases were reported in prisons in Hubei - where the virus first emerged in December in its now locked-down capital, Wuhan.

The coronavirus has infected hundreds of people in Chinese prisons, authorities said, as cases climbed outside the epicentre in Hubei province, including 100 more in South Korea and a worsening outbreak in Italy where officials announced the country's first death.

A total of 234 infections among Chinese prisoners outside Hubei ended 16 straight days of declines in new mainland cases. Another 271 cases were reported in prisons in Hubei - where the virus first emerged in December in its now locked-down capital, Wuhan.

U.S. stocks sold off and the Nasdaq had its worst daily percentage decline in about three weeks on Friday as the spike in new coronavirus cases and data showing a stall in U.S. business activity in February fueled investors' fears about economic growth. The rise in coronavirus cases sent investors scrambling for safe havens such as gold and government bonds.

Chinese state television quoted Communist Party rulers as saying the outbreak had not yet peaked amid a jump in cases in a hospital in Beijing.

Total cases of the new coronavirus in the Chinese capital neared 400 with four deaths.

China has reported a total of 75,567 cases of the virus to the World Health Organization (WHO) including 2,239 deaths. In the past 24 hours, China reported 892 new confirmed cases and 118 deaths.

US activity in the manufacturing and services sectors stalled over growing concern of the potential toll of the virus, a survey of purchasing managers showed on Friday.

The IHS Markit flash services sector Purchasing Managers' Index dropped to its lowest since October 2013, signalling that a sector accounting for roughly two-thirds of the US economy was in contraction for the first time since 2016.

Data also showed Japan's factory activity suffered its steepest contraction in seven years in February, underlining the risk of a recession there as the impact of the outbreak spreads. Asian and European stocks also fell.

The impact of the outbreak on global growth "may be large" given China's role in the world economy, and may stress financial markets just as tensions over a US-China trade war did in 2019, Bank of England policymaker Silvana Tenreyro said on Friday.

The outbreak may curb demand for oil in China and other Asian countries, depressing prices to as low as $57 a barrel and clouding growth prospects across the Middle East, the Institute of International Finance said.

The WHO warned that the window of opportunity to contain the international spread of the epidemic was closing after cases were reported in Iran and Lebanon.