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Market round-up: investors showing uncertainty over the impact of coronavirus

By Philip Smith

Economic news – company figures, growth rates and expected stimuli – has impacted the equity and currency markets today

Investors are still uncertain about how much of an impact coronavirus will have on the global economy. Each day the markets react to a bout of positive or negative virus news, sometimes closing up, other times with dramatic losses.

Today it was news of 5,000 new cases – bringing the total to 65,000 – although that figure may have been boosted in recent days by the use of the less reliable, but far faster, MRI screening rather than lab testing.

Movement in the markets seems to come down to domestic impact and whether traders think that will be long or short term.

In the Far East, markets generally closed slightly up. The Shanghai at 0.38 per cent and the Hang Seng at 0.31 per cent. Apart from the Nikkei, that is. It had a bad dose of virus news – more cases detected and Japan’s first virus-linked death. It closed down 0.59 per cent.

The Japanese market wasn’t helped by some poor corporate news from some of its major players, notably Nissan, whose shares dropped by more than 10 per cent following a profit and dividend warning.

Overall, European shares faded on news that the eurozone economy grew just 0.1 per cent in the fourth quarter of 2019, which is the weakest pace of growth for more than six years.

The IBEX 35 (Spain) was up 0.47 per cent, the rest were showing red: The CAC (France) was down 0.39 per cent, affected by a knock-on effect of the Nissan news, which impacted majority shareholder Renault’s figures – recording its first loss in 10 years.

In London the FTSE closed down at 0.58 per cent with drugmaker AstraZeneca dropping more than 5 per cent after failing to meet earnings expectations and Royal Bank of Scotland Group also down after announcing plans to cut its investment bank and rename the company as NatWest.

On the currency markets, the pound fell against the dollar, euro and yen but still ended up a jot above the magical $1.30. The losses – which ranged between 0.15 and 0.19 per cent – could have been larger had traders not been anticipating more UK borrowing with new finance minister (Chancellor) Rishi Sunak expected to implement policies that will lead to an economic stimulus.

The euro rallied late in the day, just as the European stocks were falling, probably driven by the same economic news. As a result, gold surged to new all-time record highs in euro terms to reach €1,456 an ounce.

FURTHER READING: Eurozone GDP growth poorest since 2013

FURTHER READING: Nissan shares fall by more than 10 per cent

FURTHER READING: Renault reports first loss in a decade

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