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Global stocks fall after Apple posts coronavirus warning

By Philip Smith

Doom spread from east to west fuelled by a dramatic drop in profits at HSBC, with the announcement of a major cost-cutting programme

Screens of stock traders across the globe turned red today on the back of significant negative news.

Apple revealed it has been suffering at the hands of the coronavirus, or Covid-19 as it is officially known.

As reported here, it has seen supply and demand in China affected. Add in the impact on component makers and the global repercussions of Apple’s ability to meet demand are raised.

On the NASDAQ its stock was trading down around 2.5 per cent at 4pm GMT.

Further worrying news for investors came in the form of HSBC, whose profits were down 33 per cent. Again, as reported here, it is now looking to cut costs.

It points the finger at its UK and US investment banking operations rather than the coronavirus as a cause, even though the bulk of the UK bank’s revenues come from Asia.

Apple affected the Hang Seng in Hong Kong, which closed down 1.54 per cent. That, however, was mostly down to hotel chain InterContinental saying its revenues have been hit, citing the civil unrest in the region. In Japan the Nikkei 225 also closed down 1.4 per cent.

Despite the gloom inspired by Covid-19, China’s Shanghai Composite actually closed up 0.045 per cent.

Europe followed suit; the CAC 40 in Paris closed down 0.48 per cent, the DAX (Frankfurt) 0.75 per cent and the pan-European STOXX 50 fell by 0.51 per cent.

The UK did lighten the mood with good news on the employment front. It posted record levels at 76.5 per cent between October and December, with the unemployment rate at 3.8 per cent the joint lowest level since early 1975.

Despite this, the FTSE also closed down 0.69 per cent at 7382.01

Across the Atlantic, the markets were trading after a day off for Presidents’ Day. After hours of watching downward trading elsewhere, the markets there followed suit.

At 5pm GMT the Dow Jones industrial average was down 0.92 per cent as was the S&P 500 (by 0.71 per cent) and NASDAQ (0.44 per cent).

The stock slump gave a boost to the bond market. French, German and UK 10-year government bond yields each slipped three basis points. The higher a bond price, the lower the yield.

On the currency markets, the pound was up against the dollar, euro and yen. The euro had a bad day, down across the board led by a German investor-confidence index dropping significantly on fears of a growing global fallout from the coronavirus.

FURTHER READING: HSBC plans $100 billion in asset sales and major revamp after profits slide

FURTHER READING: Apple demand and supply hit by coronavirus

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