Markets unmoved as Trump and Han talk up global economy
Upbeat Davos speeches by US President and Chinese Vice Premier fail to lift concerns over coronavirus
Bullish speeches by US President Trump and Chinese Vice Premier Han at the World Economic Forum (WEF) at Davos did little to cheer anxious investors on Tuesday.
Trump used his keynote speech to hail economic growth under his leadership as a “roaring geyser of opportunity” and said US relations with China had “probably never been better”.
Han pledged that China would lower tariffs, cut non-tariff barriers and create new free trade zones to spur growth. “The phase one trade deal between US and China is good for both countries, and for the world,” he said.
The world – or at least its markets – remained unmoved. Major Asian indices endured a difficult day as worries about the potential economic effects of a coronavirus pandemic spooked investors.
The Chinese SSEC ended the day down 43.65 points on 23,864, a 0.91 per cent fall.
The new coronavirus strain originated in China and has already spread to Japan and Thailand. The Japanese Nikkei was down 0.91 per cent on the day, while Hong Kong’s Hang Seng index lost 2.81 per cent of its value.
Travel and tourism stocks were worst affected as the virus anxiety quickly infected Europe. London’s FTSE suffered a 0.53 per cent fall, despite better than expected UK employment figures. Germany’s DAX traded largely flat, up 6.9 points on the day.
The coronavirus outbreak combined with further bushfire warnings in Australia to make investors edgy. Teenage climate activist Greta Thunberg’s warning to Davos that “our house is still on fire” only added to the sense of unease.
In the US, the Dow Jones, Nasdaq and S&P 500 were all lower at 11.30 EST, the Dow falling by over 106 points in early trading, pulling back from record highs. US shares had been on record runs, so the slight correction was not unexpected.
Oil and gold were both trading lower as commodities were also hit. But Bitcoin enjoyed a bounce, rising to nearly $8,650 by 15.30 GMT.
FURTHER READING: What is Coronavirus and what impact will it have?
FURTHER READING: Trump lauds US economy and pledges to plant a trillion trees