Stocks Rise, Currencies Stable as Death Toll Tops 1000
Global traders remained cautiously optimistic about the containment of the coronavirus despite the continually rising death toll on mainland China. There were 2,478 new cases of the disease reported on Monday, with 108 more deaths reported, the highest daily tally thus far. The death toll now sits at 1,016 deaths. Nevertheless, global markets continue to head higher, will all three Wall Street benchmarks closing higher and Asian indexes trading broadly higher on Tuesday afternoon in Asia.
Hong Kong’s Hang Seng Index led the gains on Tuesday, trading up 1.44 percent as of 2:05 p.m. HK/SIN. South Korea’s Kospi was up 1.11 percent, and Australia’s ASX, closely linked to the Chinese economy, gained 0.61 percent. Both of China’s benchmark indexes were higher, with the Shanghai Composite gaining 0.6 percent and the Shenzhen Composite up 0.41 percent despite the continued closure of many factories and businesses in the country.
New reports from CNBC analysts have highlighted the fact that the coronavirus isn’t just impacting Chinese businesses – global businesses have also been affected. Though the focus of the pressure has recently been on U.S. businesses such as Starbucks, McDonald’s and Ford Motors suffering closures due to contagion fears. Still, Capital Economics has said that African countries are also getting hit hard, with port closures in China affecting African exporters negatively, especially in West Africa. Exports to China account for more than 50 percent of the GDP in the Republic of the Congo. 20 percent of Angola’s GDP is China-dependent. African countries are also especially exposed to the coronavirus due to their lower level of healthcare as compared to more developed countries.
Oil futures surged higher on Tuesday as traders remained optimistic that the epidemic would soon run its course, despite little supporting evidence to the fact. U.S. WTI futures rose 1.31 percent to $50.22 per barrel, and Brent crude futures were up 1.48 percent to $54.06 per barrel. Gold prices, conversely, were down 0.538 percent as traders sold safe-haven assets in exchange for riskier positions. Gold futures were trading at $1,571.00 per ounce in the mid-afternoon in Asia.
On the currency markets, the dollar index made modest gains, trading up 0.04 percent as the greenback moved higher against the yen. The dollar was up 0.15 percent against the safe-haven yen, trading at 109.91. The pound gained slightly against the dollar, up 0.02 percent to $1.292. The euro was unchanged against the greenback after closing at a 50-day low on Monday.