Global equity markets opened sharply lower on Monday as investors dumped risky equities on growing concerns over the scope of a China virus outbreak. Safe-haven assets such as the Japanese Yen and Treasury notes rose as investors sought protection. Concerns over the spread of the coronavirus in China, and the potential economic impact, are expected to dominate the financial market headlines throughout the week.
China’s President Xi Jinping on Saturday warned that the spread of the coronavirus presents a “grave situation.” Xi ordered all levels of government to “put people’s life and health as top priority,” according to the state-run outlet Xinhua News Agency.
“Life is of paramount importance. When an epidemic breaks out, a command is issued. It is our responsibility to prevent and control it,” Xi said at a meeting of the leaders of the Communist Party of China, according to Xinhua.
Officials Watching China
The ability of the coronavirus to spread is getting stronger and infections could continue to rise. Chinese health authorities said Monday there were 2,744 confirmed cases of pneumonia caused by the virus and 80 deaths, according to a state media report.
China’s Cabinet also announced it will extend the week-long Lunar New Year holiday by three days to February 2 and schools will return from their break later than usual, state broadcaster CCTV said.
Trade in Asia has already slowed for the Lunar New Year and other holidays, with financial markets in China, Hong Kong and Australia closed on Monday.
Global investors kept a wary eye on developments surrounding the coronavirus, which the World Health Organization (WHO) deemed “an emergency in China,” but not, as yet, for the rest of the world on the eve of the Lunar New Year holiday.
Fifth US Case of Coronavirus Confirmed
The fifth U.S. case of coronavirus was confirmed on Sunday in Maricopa County, Arizona, by the Centers for Disease Control and Prevention, the health agency said during a call with reporters. All give cases involve individuals who were described as recent travelers from Wuhan, China – the epicenter of the disease’s outbreak and where the majority of cases have been reported.
The U.S. embassy in Beijing on Sunday issued a notice saying the American consulate in Wuhan will evacuate its staff and some private citizens on a charter flight Tuesday to San Francisco, though seat numbers will be limited.
Hong Kong Declares Emergency
On Saturday, Hong Kong leader Carrie Lam declared a virus emergency in the city of 7.3 million, halting all official trips to mainland China, extending school cancellations and scrapping official plans for the Lunar New Year, China’s busiest travel week.