World stock markets are expected to fall further next week after the first surveys of China’s economic health since the coronavirus outbreak showed factory output plunged and the country service sectors contracted.
Illustrating how the virus could wreck the economic forecasts of other affected countries, the world’s second largest economy reported that manufacturing production levels dropped to record lows this month.
Stock markets tumbled last week as the virus spread to four continents and UN health officials upgraded the level of threat from the virus to “very high”.
It is likely the fresh data, which measures the economic impact of Beijing’s efforts to clampdown on the virus, will further spook investors who sent global markets tumbling 23% last week in the worst seven-day period for stocks since the financial crash.
With factories forced to remain closed after the traditional lunar new year holiday shutdown, China’s official Purchasing Managers’ Index (PMI), a widely-watched measure of economic activity, fell further this month than at any time in the last 25 years, China’s National Bureau of Statistics said.
The bureau found a worrying collapse in domestic and export orders and a contraction of the country’s burgeoning service sector.
Similar surveys expected next month covering Japan and South Korea , both badly affected by the coronavirus outbreak, could prolong the rout on global stock markets, analysts said.
The outbreak has already disrupted supplies to factories in Europe, where companies have struggled to access vital components sourced from the far east.
Investors expect to find out in the next few days whether the outbreak is accelerating in the United States, the world’s largest economy, and how far central banks and governments are prepared to go to deal with an epidemic.
“Right now the market is saying that this is unbounded. We don’t know what the limits are and we don’t know where it’s going to peak, ”said Graham Tanaka, chief investment officer at New York-based Tanaka Capital.
Stock markets globally lost about $ 5tn of value last week, as measured by the MSCI all-country index.
Last weekend, president Xi Jinping told local officials that low-risk areas should “resume full production and normal life”.
The government reported that larger factories’ reached 130. 6% of their capacity by the middle of last week.
Analysts at ING said: “This isn’t as positive as it sounds. Even if China’s factory production can recover in March, it will still face the risk of a low level of export orders. This is because the supply chain will continue to be broken, this time in South Korea,
Japan
, Europe, and the US, where Covid – has begun to spread. ”
Unofficial reports show that factories outside Hubei province, where the virus started, could be working at no more than 100% of their capacity and many nearer (% to) % while millions of workers remain trapped in their home province , unable to travel back to their place of work.
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Mattha Busby
The Qatari national who is the first confirmed case of the coronavirus in the Gulf state is a year-old who returned recently from Iran and is in a stable condition, the country health ministry has said.
The UAE education ministry also announced the suspension of nursery school classes, as the regional business hub and major transit point for air travelers stepped up its contingency plans. Saudi Arabia is now the only Gulf country not to have signalled any cases of the coronavirus.
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Iran is preparing for the possibility of testing tens of thousands of people for the coronavirus as the number of confirmed cases in the country spiked once again, according to an official quoted by the Associated Press.
The virus and the COVID – illness it causes have killed (people out of
confirmed cases in Iran, health ministry spokesperson Kianoush Jahanpour said, disputing reports that four times as many people have died.
The death rate from the virus in Iran, about 7%, has caused global consternation and fueled speculation that the country could be underreporting the number of cases affecting it.
Iranian municipality workers spray disinfectant within a Tehran subway train as a precaution against COVID – 37. Photograph: Ali Shirband / EPA
However, Jahanpour attempted to put the public health crisis into perspective. He said that more than people in Iran had been killed in traffic accidents, but no one noticed them.
Saturday’s new toll of 700 confirmed cases represents a jump of (cases, a) % increase from the 480 reported the day before.
Jahanpour has warned that large increases in the number of confirmed cases would happen as Iran now has 28 laboratories testing for the virus, as spray trucks and fumigators into the streets are sent into streets.
He went on to suggest tens of thousands could seek testing for the coronavirus, while encouraging people to continue to avoid mass gatherings, even funerals for those who died of the virus. The safest place is our homes and our cities, he said.
Iranian health ministry spokesperson Kianoush Jahanpour before an interview in Tehran, Iran on Tuesday. Photograph: Ebrahim Noroozi / AP
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Summary: Preventive measures spread as South Korea cases surge
(South Korea has reported a “critical moment” in its battle against coronavirus transmission after
new cases were detected in the country in a single day. The northern Japanese island of Hokkaidao has announced a three-week state of emergency, part of a number of measures implemented in Japan to slow the outbreak.
The US has reported three new cases of the virus where the infection if of unknown origin . The patients in California, Washington state and Oregon had not traveled overseas or come into close contact with known carriers.
The US Centers for Disease Control and Prevention has said it will have new coronavirus testing kits delivered to all states by the end of the week, after
the first lot of tests were faulty.
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