BackIndia stock markets seen under pressure as coronavirus outbreak spreads
Death toll in China touched 908 as of SundayConcern over the outbreak has hit risk appetite
PremiumMumbai: Indian equities are expected to be under pressure on Monday in line with weakness in global markets. Equities and oil fell, while safe-haven gold rose on Monday as the death toll from the coronavirus outbreak surpassed the SARS epidemic, raising alarm bells about its severity.
As many as 908 people have died in China's central Hubei province as of Sunday, with most of the new deaths in the provincial capital of Wuhan, the epicentre of the outbreak.
MSCI's broadest index of Asia-Pacific shares outside Japan stumbled 0.7% to be on track for its second straight day of loss. Japan's Nikkei fell 0.8%, while South Korea's KOSPI was off 1.4% and Australian shares eased 0.5% .
The losses extended from Wall Street on Friday where the Dow fell 0.9%, the S&P 500 declined 0.5% and the Nasdaq dropped 0.5%.
Evan as Chinese authorities made plans for millions of people returning to work after an extended Lunar New Year break, a large number of workplaces and schools are likely to remain shut and many white-collar employees will work from home.
Worries about the hit to the world's second-largest economy has hurt investor risk appetite though confidence in China's ability to contain the epidemic has prevented sharp losses. China's central bank has taken a raft of measures to support the economy, including reducing interest rates and flushing the market with liquidity. From Monday, it will provide special funds for banks to re-lend to businesses working to combat the virus.
Despite the measures, many of China's usually teeming cities have almost become ghost towns as authorities have ordered virtual lockdowns, cancelled flights, closed factories and shut schools.
On Friday, Singapore raised its coronavirus alert level and reported more cases not linked to previous infections or travel to China. An advance team of international experts led by the World Health Organization (WHO) left for Beijing to help investigate the epidemic, the Geneva-based agency said on Sunday.
The virus has dominated broader market sentiment with better-than-expected U.S. jobs data on Friday failing to buoy sentiment. Non-farm payrolls increased by 225,000 jobs in January, with employment at construction sites increasing the most in a year amid milder-than-normal temperatures, the Labor Department said.
Back home, two years after India’s biggest banking scam blew up at the Punjab National Bank (PNB), the state-run lender is hoping to leave the past behind and rebuild its tattered reputation with greater disclosures. In February 2018, PNB reported that some of its employees had colluded with diamond tycoon Nirav Modi, issuing him letters of undertaking (LoUs) without keeping records. The bank filed a complaint with the Central Bureau of Investigation. Modi, whose companies borrowed about $1.5 billion overseas against these LoUs, has since stayed out of India.
Union finance minister Nirmala Sitharaman on Sunday said petrol and petroleum products are already under Goods and Services Tax (GST) and states have to decide when they want petrol and petroleum products to be taxed under GST.
The markets regulator has sent fresh notices to rating companies for failing to warn bond investors of Infrastructure Leasing and Financial Services Ltd (IL&FS) in time about the scam at the shadow lender, two people with direct knowledge of the matter said, after its board disapproved of the low penalty imposed on them on 26 December.
Meanwhile, benchmark 10-year US Treasury notes ticked higher to push yields down to 1.5645%.
Euro zone bond yields also fell after German industrial output tumbled in December to notch its biggest fall since January 2009, fanning concerns about the bloc's biggest economy.
The euro held near four-month lows at $1.0950. The dollar slipped against the yen to be on track for a second straight day of losses. It was last at 109.61 yen.
The Australian dollar, considered a liquid proxy for China plays, briefly hit an 11-year low of $0.6679. It had declined 0.2% last week to clock its sixth straight weekly loss. That left the dollar index flat at 98.662.
Oil prices slipped as Russia said it would need more time before committing to output cuts along with the Organization of the Petroleum Exporting Countries and other producers amid falling demand for crude as China battles the coronavirus.
Since 17 January, oil prices have fallen 14% while copper is down around 10%.
Brent crude futures declined 52 cents to $53.95 a barrel, while US crude futures slipped 45 cents to $49.87 a barrel.
US gold futures added 0.3% to trade at $1,577.5 an ounce. Spot gold was higher at $1,574.4.
(Reuters contributed to the story)
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