(Alliance News) - Stock prices in London are seen opening in the red on Monday amid fear about the quickening spread of the deadly coronavirus in China.
The toll from China's viral epidemic spiked on Monday to 80 dead with hundreds of new infections despite unprecedented quarantines and travel lockdowns, as foreign governments scrambled to help their trapped citizens.
Cases have been reported as far afield as France, the US and Canada, with various countries in Asia also detecting cases. Those infected had previously been in China.
The new additions to China's death toll came entirely from the epicentre province of Hubei, which on Monday reported 24 fresh fatalities. Most fatalities and overall cases have been in Hubei, and the government says the deaths have largely been elderly or people already weakened by pre-existing health conditions.
But China's National Health Commission said on Monday in addition to 2,744 confirmed infections nationwide - an increase of 769 - there were nearly 6,000 suspected cases and more than 30,000 people under medical observation.
Further, the national government decided it will extend the Lunar New Year holiday and related school closures beyond the original Thursday end-date to "reduce population flows," state media reported. The holiday was extended to Sunday, February 2.
IG futures indicate the FTSE 100 index is to open 85.38 points lower at 7,500.60. London's blue-chip index closed up 78.31 points, or 1.0%, at 7,585.98 on Monday.
CMC Markets analyst David Madden said: "Before the coronavirus situation broke out, stock markets in Europe as well as the US were in a strong position. In mid-January the FTSE hit its highest level since the summer, the DAX registered a record-high during the health crisis, and the major US indices set a series of record highs.
"Some traders were questioning the lofty valuations of stocks, so now the fear surrounding the health crisis has acted as an excuse to take money off the table. Last night it was announced there were five confirmed cases of coronavirus in the US, so sentiment is likely to remain sour."
The Japanese Nikkei 225 index closed down 2.0%. Financial markets in China and Hong Kong were closed for the Lunar New Year holiday.
The pound was quoted at USD1.3065 early Monday, flat from USD1.3068 at the London equities close Friday.
The euro was quoted at USD1.1027 early Monday, flat from USD1.1025 late Friday. Against the yen, the dollar was trading at JPY109.05, lower than JPY109.36 late Friday.
Oil was quoted at USD59.36 early Monday, sharply lower than USD60.72 late Friday, amid concern the health crisis in China will curtail economic activity and therefore energy demand.
Gold was quoted at USD1,579.42 early Monday, up from USD1,571.18 late Friday, amid the risk-off investment atmosphere.
In the US on Friday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.6%, and the S&P 500 and Nasdaq Composite both ended down 0.9%.
The US earnings calendar this week includes results from a slew of household names including: iPhone maker Apple, plane maker Boeing, software firm Microsoft, carmaker Tesla, and from oil majors Chevron and Exxon Mobil.
The UK corporate on Monday has annual results from recruiter SThree.
The economic events calendar on Monday has UK mortgage approvals figures at 0930 GMT.
Ahead in the UK corporate calendar this week, Royal Dutch Shell and Unilever kick off the earnings season in earnest as the oil and consumer goods giants report annual results on Thursday. Stockbroker Hargreaves Lansdown reports interim results on Friday.
Ahead in the economic calendar this week, the US Federal Reserve will announce its monetary policy decision on Wednesday. The Bank of England will announce its own interest rate decision on Thursday, which will be the last under Governor Mark Carney.
"The Bank of England will be in focus this week as the central bank will announce its interest rate decision. Traders are pricing in a roughly 50% chance of an interest rate cut from the UK central bank, but keep in mind the markets were showing approximately a 70% about one week ago," CMC's Madden noted.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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