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Coronavirus sees global stocks drifting lower; and Irish stocks slump after general election

By Elena Berton

Investors wonder whether the rate of contagion is far from being under control after the World Health Organization warns of more cases. Meanwhile, Irish stocks take a tumble as Sinn Féin gains a high percentage of votes

Irish election results are bad news for the taoiseach and Fine Gael leader Leo Varadka API

Global shares dipped with the spread of the coronavirus, while Irish stocks slumped following the country’s general election, which gave nationalist party Sinn Féin the highest percentage of votes.

As cases of the coronavirus outside of China continue to rise and various companies pull back from international meetings, investors are wondering whether the rate of contagion is far from being under control.

The death toll from coronavirus has reached 910, surpassing the number that died during the SARS outbreak in 2003. And the World Health Organization warns that countries outside of China should brace themselves for a spread of the outbreak.

Shares of hotpot restaurants Haidilao and Xiabuxiabu dropped as much as 7 per cent on the Hang Seng following news that nine members of the same Hong Kong family contracted the virus after sharing a meal.

“This coronavirus seems to be going on for longer, is infecting more people and the hit to growth will be longer,” Diana Mousina, an economist at AMP Capital Investors, told Bloomberg TV. “You won’t be able to recoup all of the negative impacts in the first quarter.”

The pan-European STOXX 600 index was almost unchanged at 424.59, up 0.05 per cent, in late-afternoon trading following its best week in three months.

Europe’s benchmark indexes closed lower, with Germany’s DAX down 0.15 per cent, France’s CAC40 0.23 per cent lower and the FTSE100 down 0.27 per cent at 7446.88.

Ireland’s ISEQ dropped more than one per cent, reflecting sharply lower bank and real estate stocks after the Irish nationalists secured almost a quarter of first-preference votes.

Investors fear a negative impact from Sinn Féin's policies, which include an end to tax breaks for banks and a large-scale public-housing building plan.

Across the Atlantic, the Dow and S&P 500 opened slightly in the red as fears over the coronavirus lingered, but later pared losses from the pre-market session.

The S&P 500 was trading 0.05 per cent lower at 3,326.11, with the Dow down 0.04 per cent at 29,089.98 in mid-afternoon trading. Nasdaq was the better performer among the US indexes, up 0.05 per cent at 9,529.66.

Oil futures slipped, dragged by shrinking Chinese demand for crude and suggestions that OPEC and its allies are unlikely to further cut production in the short term.

West Texas Intermediate crude for March delivery was down 0.4 per cent to $50,14 (£38,77, €45,79) a barrel, while April Brent crude slipped 0.2 per cent to $54,36 a barrel.

Gold further strengthened 0.1 per cent to $1,572.24 an ounce, on track for four consecutive gains as investors sought shelter against the negative economic impact from the outbreak.

The euro and the Japanese yen were little changed, while the pound rose 0.3 per cent. The dollar edged lower having risen more than one per cent last week.

Bitcoin traded just below the $10,000 mark after hitting that level during the weekend for the first time since October.

Chinese authorities are shutting down Bitcoin mining farms in an effort to contain the spread of the coronavirus epidemic, prompting concerns that mining activities may be hit if the outbreak continues.

FURTHER READING: Irish index stutters as Sinn Fein demands to be included in government

FURTHER READING: China gradually returns to work amid coronavirus disruptions

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