Oil falls below 60 dollars
The coronavirus is weighing on the tourism and transportation sectors, where restrictions on regional flights continue to expand. In the aftermath, the European stock markets opened sharply lower.
The coronavirus continues to panic the markets. In the wake of the fall in Asian stock markets, oil fell on Monday. The barrel of Brent, the American benchmark, fell below the 60 dollar mark, after falling more than 3% in the early morning. A first since the start of 2020.
In question, the new assessment of the coronavirus, which has already made more than 80 victims in the country and some 2,700 infected people. In addition, the Chinese authorities have announced that the spread of the epidemic could last and accelerate, raising concerns for the transport and tourism sectors.
If the virus persists, expect a lasting drop in oil, says Damien Courvelin, an analyst at Goldman Sachs. “Ultimately, we expect kerosene markets to decline significantly if this epidemic continues, given the likely decline in regional air travel.” Traffic restrictions continue to spread in China in the hope of stopping the epidemic. “Departures from the five main Chinese airports have decreased by nearly 800 flights this weekend compared to last weekend, while traffic at the five airports closest to Wuhan has decreased by almost 50% in recent days Notes a note from the Royal Bank of Canada.
European stock markets fall European stock markets also opened sharply lower. In Paris, the CAC 40 posted a decline of more than 1.6% to 5,924 points, while the Parisian odds ended with a gain of 0.88%. The DAX, based in Frankfurt, and the London stock market, also opened at -1.4%. At the end of the morning, the fall in European stock markets exceeded 2%. “The fear of the coronavirus is increasing on the markets because the economic consequences for China should not be underestimated,” comments Milan Cutkovic, an analyst at Axitraders.
Investors reacted by turning to safe-haven stocks, notably gold, which rose 1.1% to \$ 1,588.68 an ounce. Meanwhile, yields on 10-year US Treasuries – which declines in times of instability – fell four basis points to 1.6408%.