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Coronavirus disease, whose epicentre should be China’s Wu-Han province, has already spread to different places of our planet, so it affects the lives of millions of people.
Due to the fact that we were unable to suppress the coronavirus by now and the number of infected people is rising from day to day, with little exaggeration, we see also financial markets being hit by this disease, where uncertainty and fears from further development of it are becoming real. And right these impacts of the virus are going to be our main topic today.
So, let’s take a look at it…
China’s stock index
As a result of the coronavirus, China’s stock index has lost almost 4.5% from half of January. Naturally, the travel industry was the top laggard where some stocks lost more than 10%. Conversely, in case of China’s equities, the health industry enjoyed this period (sale of pharmaceutical products and accessories rose) when stocks of certain companies soared more than 50% from January (Zhende Medical Co).
U.S. indices
S&P500 index Index Dow Jones NASDAQ index
- The most watched U.S. index S&P500, comprising of shares of the 500 largest companies of the United States, lost more than 3%, mainly due to the panic from coronavirus, since mid-January. In general, we see that the biggest losers at stock markets are companies whose portion of profits comes from Chinese markets or the travel industry.
Czech Koruna and U.S. Dollar
With regard to this uncertain situation, the Czech Koruna is weakening as well as investors started to look for a safer haven for their investments – and that’s not Koruna. Conversely, the U.S. dollar is still considered a relatively safer investment for investors, so its value against other currencies rise.
Gold
Gold used to belong, still is, and probably it’s also going to remain an investment for capital at uncertain periods as this precious metal ensures a relatively stable and risk-free investment, rising by even 4% in January! An interesting fact about gold, and its actual market development, is that if the price of gold rose at the same pace as in January, by the middle of 2020, we could see a new historical max that would overcome the one achieved in 2011.
Conclusion
The question remains if the coronavirus is such a threat as world media point to or if it’s going to be just another type of virus that fades away quickly as well?
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About the Author
Team Purple Trading
Purple Trading is a true and 100% fair ECN / STP forex broker providing direct access to the real market. High speed orders execution, no trade-offs, no limits for any type of trading, the most advanced trading technologies. Explore more about Purple Trading at www.purple-trading.com .
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