Topline: Markets in Asia continued to slide after a steep drop on
Monday, as government in South Korea and Italy stepped up efforts to contain
the spread of the pneumonia-like virus while a new case of coronavirus was
detected in Spanish tourism hotspot Tenerife.
·
Stocks in Asia
continued to fall on Tuesday, with Japan’s Nikkei seeing the steepest fall of
3%, while China’s Shanghai Composite fell 1.6%. On Monday, U.S. stocks saw
their steepest fall in two years, with the Dow falling more than 1,000
points.
·
Spain's IBEX 35 Index
was down 1.28%, and Italy's MIB fell 0.92% at the midmarket following Monday's
sell off.
·
Some 1,000 people have
been quarantined at a hotel in Tenerife in Spain’s Canary islands and await
testing, after a visiting Italian doctor tested positive for the virus.
·
South Korea, where
around 900 people are infected, is stepping up efforts to contain the virus, as
authorities hope to test 200,000 members of the Shincheonji Church of Jesus, a
Christian sect that has been linked with 60% of the cases in the country. The
outbreak began after a 61-year-old woman was infected, while the CDC on
Monday advised U.S. residents against non-essential travel to Korea.
·
Italy, which is the
largest cluster of Covid-19 cases outside Asia, has seen a spike in cases, from
three last week, to at least 220 in latest figures, while seven people have now
died from the virus. The U.K. is advising residents who have returned from
northern Italy and have flu-like symptoms to self-isolate for 14 days.
·
Iran has recorded at
least 16 deaths and 95 cases, and the outbreak there has mounted
fears of a worsening global pandemic after travellers who came from Iran and
landed as far as Canada have tested positive for the virus.
·
U.S. government has
requested Congress allocate $2.5 billion funds to buy more medical supplies and
develop new vaccines, the New York Times reports. It comes after Trump reportedly
proposed a 16% cut in funding to the CDC in the 2021
budget.
What to watch for: Whether the outbreak will have an effect on
the Tokyo Olympics, which kick off on July 24. Japanese health minister
Katsunobu Kato said it is too early to discuss cancelling the
global event.
Big number: $1 trillion. That’s how much a global coronavirus pandemic
could cut global GDP by, according to economic forecaster Oxford Economics. In
a global pandemic scenario, U.S. and European economies could enter a technical
recession in the first half of the year, but recovery would be fast. The
scenario is based on historical precedents, including the 2003 SARS outbreak
and the 2009 swine flu pandemic, and counts things like supply chain
disruption, lower travel and tourism, labour shortages and a drop in consumption.
Key background: The coronavirus outbreak has shown how
disruption to China's economy, the world's second largest, can ripple out to
the rest of the world often in unexpected ways. Supply chains of the world’s
biggest tech companies, retailers and carmakers have been impacted by labour
shortages and factory shutdowns. More than 80,000 people—10 times more than the
2003 SARS outbreak—have been infected with the coronavirus in more than 30
countries, while more than 2,600 have died. The outbreak of the pneumonia-like
virus, which is now officially known as Covid-19, is thought to have originated
in China's Hubei province but the crisis has now entered a new international
phase. The WHO said the number of cases detected in China appeared to have
peaked between January 23 and February 2 but the accuracy of the Chinese
government's data has been called into question, and pockets of the virus could
flare up as movement restrictions are lifted and factories and businesses
reopen.
Tangent: Paramount Pictures has suspended filming for Mission: Impossible
7, starring Tom Cruise, after it began last week in Venice and was scheduled to
last three weeks. The Italian city in the northern region of Veneto is one of
the areas affected by the virus, while the outbreak is also concentrated in the
neighbouring Lombardy region.
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