Spreadex Market Update

Sharp spike in no. of coronavirus deaths and new cases sinks commodity-heavy FTSE



Just as the markets seemed to break free of their coronavirus fears, an alarming spike in the number of deaths and new cases sent Europe lower.

Arguably the main driver of Wednesday’s growth was the hopes that the outbreak in China was being contained. Well, changes to the way in which authorities calculate figures surrounding the illness revealed a worse situation than first thought, with a 242 person jump in the number of deaths and a 15,000 surge in total cases.

Understandably this spooked investors. The commodity-heavy FTSE was the worst hit, which was an extra blow for the index as it was already left out of the market’s record peak party on Wednesday. With BP and Shell down 2.4% and 2.1% respectively, and its miners all falling at least 1%, the FTSE shed 80 points, sinking back towards 7460.

The Eurozone indices were comparatively unfussed by the latest coronavirus news. The DAX and CAC only slipped 0.3% apiece, leaving the former on a smidge under its recent all-time highs. The reason for this muted reaction could be partially due to the euro hitting its worst price since May 2017 against the dollar.

Similarly, investors may be waiting to see whether the sharp increase in deaths and new cases is a one-off, as Chinese officials adjusts their methods of calculation.

Looking ahead to the US session and the Dow Jones is currently pencilling in drop more in line with that seen in the Eurozone, the futures promising a 0.5% fall.

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