Global Stocks Tumble Tuesday 01/21 06:21
Global stock and oil prices tumbled Tuesday as concern about the impact of a
Chinese disease outbreak increased and a rating agency cut Hong Kong's credit
rating for official borrowing due to political tension.
BEIJING (AP) -- Global stock and oil prices tumbled Tuesday as concern about
the impact of a Chinese disease outbreak increased and a rating agency cut Hong
Kong's credit rating for official borrowing due to political tension.
Japan's central bank left its key interest rate unchanged and upgraded its
economic growth outlook.
London and Frankfurt declined and Shanghai, Tokyo and Hong Kong closed
sharply lower after China announced a fourth death from coronavirus. The
outbreak, centered on the central Chinese city of Wuhan, has sickened more than
Authorities said some infections were transmitted person-to-person,
increasing the risk the disease might spread faster during the Lunar New Year
holiday, the Chinese-speaking world's busiest travel season.
Other Asian governments stepped up screening of travelers from China,
highlighting the potential impact on tourism. That prompted a selloff in of
airlines, hotel operators and other travel businesses.
The outbreak "is developing into a major potential economic risk to the
Asia-Pacific region," said Rajiv Biswas of IHS Markit in a report.
Biswas pointed to the example of the 2003 outbreak of severe acute
respiratory syndrome, whose economic impact was felt as far away as Canada and
In early trading, London's FTSE 100 lost 1.1% to 7,562.97 and Frankfurt's
DAX sank 0.7% to 13,459.81. France's CAC 40 was 1.2% lower at 6,005.76.
On Wall Street, futures for the benchmark Standard & Poor's 500 index and
Dow Jones Industrial Average were off 0.4% as markets prepared to reopen after
a three-day holiday weekend.
In Asia, the Shanghai Composite Index fell 1% to 3,063.56 and Tokyo's Nikkei
225 retreated 0.9% to 23,866.15.
Hong Kong's Hang Seng index sank 2.8% to 27,985.33 after Moody's Investors
Service cut its government credit rating by one notch to Aa3 from Aa2.
Moody's cited the lack of "tangible plans" to respond to issues highlighted
by six-month-old anti-government protests and said that may reflect "weaker
inherent institutional capacity" than previously thought. The protests began in
June over a proposed extradition law and have expanded to include demands for
greater democracy in the Chinese territory.
Seoul's Kospi sank 1% to 2,2239.69 and Sydney's S&P ASX 200 lost 0.2% to
7,066.30. India's Sensex was 0.3% lower at 41,381.52. Southeast Asian markets
Air China Ltd. lost 3.2% and Hong Kong's Cathay Pacific Airways dropped
4.1%. Japan's ANA Holdings Inc. fell 2.2%.
Also Tuesday, the Bank of Japan left its policy rate at -0.1% and affirmed
its commitment to increase holdings of government bonds. Board members raised
their economic growth projection for the year that starts in April to 0.9% from
The European central bank also is due to make an interest rate decision this
ENERGY: Benchmark U.S. oil fell 48 cents to $58.11 per barrel in electronic
trading on the New York Mercantile Exchange. The contract gained 5 cents on
Monday to close at $58.58. Brent crude, used to price international oils, lost
65 cents to $64.57 per barrel in London. It advanced 35 cents the previous
session to $65.20.
CURRENCIES: The dollar declined to 109.93 yen from Monday's 110.18 yen. The
euro edged down to $1.1091 from $1.1094.