LONDON: Financial markets steadied on Tuesday following a global sell-off fuelled by a new deadly virus outbreak in China that risks impacting the global economy.
Europe’s main stock markets were up 0.5 per cent a day after slumping around 2.5 per cent.
Tokyo extended its losses but Tuesday’s drop was less sharp at 0.6 per cent.
Dollar falls against safehavens such as the yen and Swiss franc were also less sharp, while oil prices recovered.
“Calm has descended across global markets after yesterday’s sell-off,” said Neil Wilson, chief market analyst at Markets.com.
Markets remain “open to further falls if it becomes clear that infection is spreading more rapidly, but for now equity markets are entering a process of stabilisation”, he added.
China on Tuesday urged its citizens to postpone foreign travel to curb a viral outbreak that has killed 106 people, as the first cases of human-to-human contagion were detected abroad.
While traders have sought safety, for example buying into gold, oil tanked on Monday on expectations that demand in China, the world’s top consumer, will be hammered.
The outbreak comes during the Lunar New Year break when hundreds of millions of people criss-cross China and spend huge amounts of money.
Analysts said there were growing fears the crisis could become as bad as the SARS outbreak that rocked markets and the global economy 17 years ago.
The VIX “fear” index, which measures market volatility, soared by one quarter on Monday to the highest level since October, when investors were worried about China-US trade talks. — AFP
Oman Observer is now on the WhatsApp channel. Click here
