Jan 27 (Lagos) - The rapidly growing coronavirus in China is leading to stock market sell-off's worldwide and this week seems like its going to get very ugly. There is already a state of emergency is multiple provinces of the country and China has also extended its new year holiday by one week which means its markets will remain closed along with major businesses.
In New York, S&P 500 futures are down 1.31%, Dow futures are down 1.38% and NASDAQ futures are down 1.65%.
Japan's NEKKEI closed lower by 2.03%
India's SENSEX fell 1.1%
London's FTSE is currently down 2%
France's CAC index is down 2.25%
Germany's DAX is down 2.25% also at the time of writing this article.
So what is the connection between a virus and stock markets ?
The short term impact is already there to be seen but in the long run things will bounce back and the impact will be forgotten eventually. Chinese exports will have some impact and overall growth will hamper in the world. This reminds us of the SARS outbreak in 2002-2003 which lasted months and caused stock markets to sell off worldwide. Smart traders sold last week when the writing was on the wall. They will most likely be looking to buy back at a discount this week or next week.
This is an opportunity when investors on the sidelines were waiting for. Some big tech firms report their full year results this week. The likes of Microsoft, Apple, Facebook, AMD so it is going to be interesting. We may see some surprises in these names. Hopefully the virus will not infect them.
The Nigerian stock exchange is holding up very well today and showing strength when the whole world is feeling weakness. That could soon change because of the large Chinese presence in Nigeria and Africa the virus will most likely reach the shores of Africa soon given the speed at which the virus is spreading. Nigeria should immediately stop flights from China because there is no infrastructure in place to detect cases of infections to people coming on those flights from China. Well the leaders take a long time to do anything so traders should take note and position themselves to take advantage of the dips that are likely next month due to what is likely to happen.
reporting for easykobo.com on Monday, Jan 27 2020 from Lagos, Nigeria