Stocks Fall, Treasuries Advance on Virus Concern: Markets Wrap

(Bloomberg) — Stocks dropped in Europe and Asia alongside U.S. equity futures on Friday amid renewed concern about the impact of the coronavirus as cases increased outside of China. Treasuries and gold advanced.

A retreat in the Stoxx Europe 600 Index was led by mining and energy companies. Futures on the three main American equity gauges pointed to losses at the open while shares in Korea and Hong Kong saw declines of more than 1%. Treasuries climbed, pushing the yield on 10-year securities below 1.5% for the first time since September. Gold increased.

The declines come as manufacturing data in Australia and Japan added to worries about slower economic growth, while weak South Korean export data weighed on the won. A gauge of the dollar snapped a four-day winning streak. The euro strengthened after data showed economic activity in the common-currency area sped up unexpectedly.

Investors were put on alert this week by a spike in infections outside China and a slew of fresh warnings by companies over the potential impact on business. Those reignited appetite for haven assets and threatened stock gains that had propelled global equities to a record high earlier this month. Two people evacuated to Australia from a cruise ship in Japan tested positive for the coronavirus and South Korean cases jumped by one-half to 156.

“It may be a much longer road,” Dan Farley, chief investment officer of the investment solutions group at State Street Global Advisors, told Bloomberg TV in Sydney about the virus impact. “We have to be very mindful that this is not an easily solvable issue and the impact on consumer demand for a number of different sectors is going to be something that we need to be watching out for.”

Elsewhere, crude oil rose in New York to the highest in almost four weeks as U.S. exports surged and the expansion of domestic inventories slowed dramatically. The yen rose, recouping some if its biggest two-day decline since 2017.

Here are some key events coming up:

Earnings season rolls on, with results from Deere & Co. set for Friday.Euro-area inflation data are also due Friday.Group of 20 finance ministers and central bank chiefs are due to meet Feb. 22-23 in Riyadh, Saudi Arabia, and are expected to discuss efforts to support growth amid the coronavirus threat.

These are the main moves in markets:

Stocks

The Stoxx Europe 600 Index decreased 0.4% as of 9:22 a.m. London time.Futures on the S&P 500 Index dipped 0.5%.Nasdaq 100 Index futures fell 0.6%.The MSCI Asia Pacific Index declined 0.5%.

Currencies

The Bloomberg Dollar Spot Index declined 0.1%.The euro climbed 0.3% to $1.0815.The British pound advanced 0.3% to $1.2918.The Japanese yen strengthened 0.3% to 111.75 per dollar.

Bonds

The yield on 10-year Treasuries declined three basis points to 1.48%.Germany’s 10-year yield dipped less than one basis point to -0.45%.Britain’s 10-year yield decreased less than one basis point to 0.574%.

Commodities

West Texas Intermediate crude dipped 1.2% to $53.23 a barrel.Gold strengthened 0.9% to $1,633.36 an ounce.

–With assistance from Cormac Mullen, Michael G. Wilson, Andy Clarke, Paul Allen and Adam Haigh.

To contact the reporter on this story: Constantine Courcoulas in Athens at [email protected]

To contact the editors responsible for this story: Christopher Anstey at [email protected], Todd White

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