Add to favorite
Subscribe to our Newsletters Subscribe to our Newsletters Get Daily Updates RSS

Russian Currency Fell on News of the Rapid Spread of the Coronavirus
January 27, 2020 19:53


The situation with the spread of coronavirus is worsening in China. There are already 80 victims, the number of infections is 2804. Markets are responding to the spread of the virus: oil is getting cheaper, stock indices are falling, the ruble is weakening, and the prices of assets that are traditionally considered defensive are rising.

The spread of coronavirus, which began with the Chinese city of Wuhan, is gaining momentum. According to new data from the PRC State Health Committee, 80 people have become victims of the disease, although only 56 were known the day before. In total, 2804 cases of infection have been reported. Confirmed patients are in Asia, North America, Europe, and Australia. Due to the rapid increase in the number of infected, some experts fear that China will not be able to stop the spread of the virus, Reuters points out.

The reaction of the markets was not long in coming: the price of futures for Brent crude oil for delivery in March 2020 on the ICE exchange in London on January 27 fell by more than $ 2, to $ 58.65 per barrel as at 13:20 Moscow time. Oil WTI at the same time fell by $ 1.9, to $ 52.3 per barrel. Not only oil reacted, but also the stock markets. The MSCI All-Country World Index, which tracks stocks in 47 countries, fell 0.42%, to its lowest level since January 13. At the same time, the European STOXX 600 index fell 1.4% on January 27, to the lowest level since January 14, Reuters notes. “Coronavirus is an economic and financial shock. Its scope has yet to be estimated, but it could become a spark for a possible overdue adjustment in capital markets,”  Mark Chandler, the chief market strategist at Bannockburn Securities, says.

According to the chief Asian market strategist Stephen Innes, any economic shock for China is rapidly spreading to other countries. The expert explained this by increased trade relations and globalization. “I'm starting to think that cash is the best option for the next few weeks,” Bloomberg quotes him.

According to the Financial Times, the spread of coronavirus also affected the Japanese Topix stock index, which fell by 1.6%. Futures on the S&P 500 fell slightly more than 1%. There are no results on the markets of China and Hong Kong, since they were closed due to the celebration of the New Year according to the lunar calendar, the newspaper said. According to Deutsche Bank strategy specialist Jim Reid, the spread of coronavirus for some time will be the main reason for the growing number of concerns from investors.

Amid growing fears of investors, assets that were traditionally considered defensive grew in price — gold on the Comex exchange on January 27 rose by 0.7% to $ 1,589 per troy ounce, and US treasury bonds also grew.

Due to concerns that the spread of the virus will limit demand for air travel and travel in general, United Airlines shares fell by 3.51% and American Airlines  - by 4.03%. Shares of the TUI tour operator on the London Stock Exchange fell by 2.9%.

the consequences of the spread of the virus also affected the Russian currency and stock markets. According to the Moscow stock exchange at 13:20, the euro went up by 44 kopecks, to 68.92 rubles, and the dollar -  by 47 kopecks, to 62.53 rubles. The Moscow stock index at the same time decreased by 1.91%, and  the RTS index - by 2.8%. The shares of metallurgical  (Norilsk Nickel, minus 0.5%), oil and gas (Lukoil and Gazprom, minus 2.7%) and airlines (Aeroflot, minus 5.5%) companies fell. The largest Russian gold miner Polyus stood out against the general background, which stock quotes grew by 2.6% on the afternoon of January 27. As Sergey Suverov, senior analyst at BCS Premier, noted in a conversation with Kommersant, concerns about the spread of coronavirus could affect investor optimism towards emerging markets in general and the Russian one in particular.

Author: Anna Dorozhkina

Tags: Russian economy Russian oil Rusian international   

Next Previous

You might also find interesting:

Top 3 Videos From Russia Moscow Stock Exchange to Go Public Age Restrictions for Russian Media Top 3 Videos From Russia Visa Will Stop Operating In the Crimea

Comment on our site

RSS   twitter   facebook   submit

Bookmark and Share

search on the map
Russian business  Tragedy  Kirov Oblast   Moscow  Bashkiria  Yekaterinburg  Historical Exhibitions  Russian Cinema  The Strugatsky Brothers  Turkish stream  travel to Russia  Comics  Sergey Kovalev  Exhibitions in Moscow  Aleksandr Tvardovsky  Satellites  Russian Poetry  Arctic  Mercedes-Benz Fashion Week Russia  Muzeon Park of Arts  Russian alcohol market  E-Book Reader Museum  Festivals of Russia  Pussy Riot  Russian oil companies  Russian Actresses  St. Petersburg  Books  Winzavod  Yaroslavl   Olympic champions  Russian regions  monument  gay rights  Ukraine crisis  Pobeda  Russian fashion designers  Russian tourism  St. Sophia Cathedral  Monuments to People  Rybnoe  Exhibitions Fairs  Russian newspapers  Beer  Awards  buy Russian fashion designers online  Boris Grebenshchikov  David Borovskii  Festivals in Moscow  Cinemas 

Travel Blogs
Top Traveling Sites