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Global Equity Markets Lower on Coronavirus Fears; China Makes Moves to Boost Economy

James Hyerczyk

Stocks are down around the world as investors weighed a spike in the number of new coronavirus cases reported in China’s Hubei province due to a tweak in methodology.

In a Thursday press conference, China said it confirmed 15,152 new cases and 254 additional deaths. Those figures include the ones reported earlier by Hubei province under its new diagnosis methodology. That brings the country’s total death toll to 1,367 as the number of people infected hit 59,804, according to the government.

A spokeswoman for the Shanghai Health Commission said at a press conference that the methodology for diagnosing coronavirus has not been changed in any Chinese provinces or municipalities except for Hubei.

Health workers in Hubei province began using a new method to diagnose the virus this week. Previously, infections were only allowed to be confirmed with nucleic acid tests, which can take days to process, but Hubei province is now using CT scans which can diagnose the virus more quickly.

Asian Indexes Down; Australia Bucks the Trend

On Thursday, Japan’s Nikkei 225 Index settled at 23827.73, down 33.48 or -0.14%. Hong Kong’s Hang Seng Index finished at 27730.00, down 93.66 or -0.34% and South Korea’s KOSPI Index closed at 2232.96, down 5.42 or -0.24%.

China’s Shanghai Index settled at 2906.07, down 20.83 or -0.71% and Australia’s S&P/ASX 200 Index finished at 7103.20, up 15.00 or +0.21%.

China Works to Boost Economy in Wake of Coronavirus

Market sentiment had been positive earlier in the week as the data had been showing an apparent slowdown in the pace of new reported cases, with policymakers in China having announced a series of measures to combat the expected economic slowdown from the virus outbreak.

These measures included:

  • Materials used in epidemic control to be exempt from import tariffs until March 31.
  • Support announced for debt financing and debt insurance by virus-impacted firms.
  • Government announced it had in total allocated 71.85 billion Yuan ($10.3B USD) to fight virus.
  • The People’s Bank of China injected 1.7 trillion Yuan ($242.7B USD) via open market operations.
  • China’s central bank said it will support key sectors by easing monetary policy.
  • Tax guidelines intended to reduce financial pressure in key sectors are announced.
  • Government announced state reserve 20K metric tons of frozen pork on February 14.

Global Appetite for Risk Declines

Global equity markets are down on Thursday as investors trim positions in risky assets and move money into the safety of the Japanese Yen.

European markets opened lower on Thursday morning. The pan-European Stoxx 600 was around 0.4% lower at the opening bell, with every sector plunged into negative territory.

U.S. stock index futures are pointing to a lower open on Wall Street Thursday as investors continue to worry about the spread of the coronavirus and look ahead to a slew of earnings.

This article was originally posted on FX Empire

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