European stock markets rebounded as the World Health Organisation says no ‘global emergency’ yet for China virus
European stock markets rebounded on Friday, despite rising concerns about the global spread of the deadly Coronavirus.
After the World Health Organisation designated the coronavirus outbreak an emergency for China but not yet for the rest of the world, European stock markets shrugged off worries over the pandemic.
The FTSE 100 rose 1% in early trade, the CAC 40 in Paris climbed 0.9%, and the German DAX bounced 1%.
After China put two cities on lockdown in response to the rapid spread of pneumonia-like Coronavirus, there was a sharp sell-off in stocks around the world on Thursday. According to the BBC, the lockdown was extended to 10 cities as the death toll rose to 26 people. In the UK, 14 people are being tested for possible cases.
Share prices bounced back across Europe on Friday morning despite ongoing concerns. The recovery was broad-based, with just three companies on the FTSE 100 seeing share price losses after around 45 minutes of trade.
Markets have been cautious over the last 24 hours as concerns over the coronavirus grew, Deutsche Bank strategists Jim Reid, Craig Nicol, and Henry Allen wrote in a note to clients on Friday.
They added that however we’re notably off the lows from yesterday perhaps due to news from the World Health Organization yesterday that they were not yet declaring a PHEIC (public health emergency of international concern).
Overnight, Chinese stock markets closed lower on continued concerns about coronavirus. The Shanghai Composite dropped 2.7% and Hang Seng in Hong Kong closed down 1.1%.
Chief market analyst at Avatrade, Naeem Aslam, said that credit rating agency S&P Global has warned that the continued spread of Coronavirus could knock as much as 1.2 percentage points off Chinese GDP growth.
The Nikkei in Japan managed modest gains, closing up 0.1%.
Safe-haven asset Gold had risen sharply on Thursday but sold off slightly on Friday. Futures for the precious metal were down 0.4% to $1,559.00.
