Africa Map

African Press Agency

African Press Agency Logo

 Country Profile
 Useful Links
 Contact us


[Published: Wednesday February 26 2020]

Coronavirus sends oil prices tumbling

LONDON 26 Feb (ANA) - Oil prices fell further Wednesday as investors worried about the economic impact of the spreading new coronavirus.
While stocks in Asia and Europe also slid lower, they bounced higher on Wall Street at the open of trading following two days of sharp losses.
The Dow gained 0.4 percent at the opening bell after having fallen around three percent on Tuesday when officials said COVID-19 would likely take hold in the United States.
"The major indices are all poised to open about 0.3-0.4 percent higher in the same patented buy-the-dip trade that was seen before yesterday's open, and which ultimately failed miserably," noted analyst Patrick J. O'Hare at before the opening bell.
With cases being reported in more countries -- and lockdowns in nations including Austria, Italy and Spain -- traders elsewhere have been growing increasingly fretful about the impact on the global economy.
London's benchmark FTSE 100 index dipped below 7,000 points, erasing all gains won over the past year, while oil prices slid to the lowest levels in more than a year.
But Europe's main indices trimmed their losses in the afternoon as the open of Wall Street approached.
A number of companies commented Wednesday on the impact of the virus on their operations.
British drinks group Diageo, the maker of Guinness stout and Smirnoff vodka, on Wednesday said the coronavirus would slash its annual sales by up to £ 325 million ($ 422 million, 388 million euros).
Diageo, which produces also Baileys liqueur and Johnnie Walker whisky, said sales for the group's financial year ending June 30 would be impacted by between £ 225 million and £ 325 million. 
French food giant Danone said it expected to take a hit of 100 million euros ($109 million) in first-quarter sales.
"What we appear to be seeing is the realisation that global economic growth could well come to a halt as the combined effects of a flu virus and belated attempts to stem the spread of it across the globe, raise the prospect of an economic sneeze," said CMC Markets UK analyst Michael Hewson.
The death toll is now at more than 2,700, while the number of infected has surpassed 80,000, even if the numbr of new cases in China, the epicentre, are falling.
With panicked investors seeking safe havens, the yield on both 10-year and 30-year US Treasury bills are at record lows, while the Japanese yen is gaining. 
However, the dollar was being kept in check by speculation that the Federal Reserve could cut interest rates to support markets, although for now officials are saying the US economy remains in rude health.
The VIX "fear" index is at its highest level in more than a year, but gold, usually a main target for those seeking shelter from the turmoil, was subdued.
"To suggest the market is a tad skittish over the coronavirus becoming a pandemic could very well be the understatement of the century with the virus morphing into the market's biggest macro worry of the decade," said AxiCorp's Stephen Innes.
However, Gorilla Trades strategist Ken Berman said that "in light of the quick spreading of the virus, the global economy is likely to suffer, at least, a short-term shock, but should the outbreak slow down during the spring, we could see a swift economic recovery."
- Key figures around 1430 GMT -
London - FTSE 100: DOWN 0.5 percent at 6,984.54 points
Frankfurt - DAX 30: DOWN 0.3 percent at 12,747.37
Paris - CAC 40: DOWN 0.2 percent at 5,669.24
EURO STOXX 50: DOWN 0.1 percent at 3,567.65
New York - UP 0.4 percent at 27,195.21
Tokyo - Nikkei 225: DOWN 0.8 percent at 22,426.19 (close) 
Hong Kong - Hang Seng: DOWN 0.7 percent at 26,696.49 (close)
Shanghai - Composite: DOWN 0.8 percent at 2,987.93 (close)
Dollar/yen: UP at 110.53 from 110.20 at 2200 GMT
Euro/dollar: DOWN at $ 1.0859 from $ 1.0882 
Pound/dollar: DOWN at $  1.2922 from $ 1.3005
Euro/pound: UP at 84.06 pence from 83.67 pence 
Brent Crude: DOWN 1.5 percent at $ 54.15 per barrel
West Texas Intermediate: DOWN 1.0 percent at $ 49.39(ANA)
FA/ANA/26 February 2020----

North South News website

Advertise banner

News icon UK/Coronavirus
News icon Starmer/Labour
News icon Pope/Palm Sunday
News icon Thailand/Sex workers
News icon Coronavirus/UK
News icon Malawi/Pay cut
News icon Premier League/Suspension
News icon US/Masks
News icon Kenya/Quarantine
News icon Trump/Impeachment

AFRICAN PRESS AGENCY Copyright © 2005 - 2007