European and Asian Markets continued their dismal performance into Friday. Trading activity in those markets showed dimmed investor confidence.
There were various factors for this, ranging from crude oil demand cuts to coronavirus impact on major global economies.
In this case, OPEC slashed crude oil demand outlook for 2020 by 200,000 barrels per day (bpd) to 0.99 million barrels per day (bpd). In addition, the International Energy Agency cut its 2020 oil forecast to 0.825 million bpd, signalling the lowest demand since 2011.
However, Asian markets bounced from Monday’s poor perfomance although by a slight margin. The CSI300 closed up 2.3% breathing more confidence among investors ahead of the weekend while the Shanghai composite gained 1.4% in the week.
Chinese trade deal reforms will see halving of tarrifs on $75 billion worth of American goods effective Friday 14 February.
Despite the World Health Organisation assuring the public about minimal impact of coronavirus, the death toll rose by a record margin. As of February 13, Chinese authorities reported 63,851 infections up from 44,653 on Monday. The death toll rose to 1400 from 1000 at the beginning of the week.
Gaurav Kashyap, a market strategist at Equiti Global Markets says coronavirus will have a negative impact on manufacturing and industrial production and this should catch up with equity markets in the weeks ahead.
Singaporean Prime Minister warns that the coronavirus impact on the economy will exceed the SARS impact in 2003.
Elsewhere, the South African rand strengthened the most among emerging-market currencies as president Ramaphosa pledged to curb government spending and overhaul the electricity industry.
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