Global markets are still affected by the fear of the coronavirus, as shares collapse, South Korea declares economic “emergency” and oil prices fall
- The shares listed in Frankfurt fell by five percent and the suppliers also fell
- South Korean President Moon Jae-in said the economy was in an “emergency situation.”
- An outbreak also poses a threat to Japan, which is already confronted with fear of recession
The economic impact of coronavirus grew stronger today as European tech stocks fell and South Korea warned of an economic “emergency.”
Apple’s listed shares fell by nearly five percent after the company said it would not meet its quarterly figures due to the outbreak.
Companies that make chips and other components for Apple have also fallen in value due to the large presence of China in the supply chain.
In Asia, South Korean President Moon Jae-in said the economy was in an “emergency” because the epidemic had disrupted the demand for his country’s goods.
The outbreak also poses an increasing threat to Japan, the world’s third largest economy, which is already gripped by the fear of a recession.
Meanwhile, oil fell below $ 57 a barrel until Tuesday, as experts said the outbreak had “shocked” the markets.
A man with a protective mask walks in front of a display board on the Shanghai Stock Exchange, while markets continue to feel the impact of the virus outbreak
Apple issued its income warning after discovering that factories that make iPhones have resumed production slower than expected.
Many employees were unable to return to work during a longer lunar holiday due to drastic travel restrictions in China.
Stacy Rasgon, an analyst, said the misery of Apple probably means that fewer chips will be sold throughout the industry because the vast majority are made in China.
“Maybe this is the wake-up call. I would be surprised if Apple is the only one, “he said. “Every electronic supply chain runs through China in a big way.”
Shares in Apple’s chip suppliers came on the news, including Samsung Electronics, Taiwan Semiconductor Manufacturing Co., and SK Hynix.
The technology-heavy German stock index fell 0.8 percent today, while the European tech index fell 1.4 percent.
“This has frightened market players and led to a sharp fall in risky assets,” said Tamas Varga of PVM, oil broker, referring to Apple’s statement.
Other sectors in Europe exposed to China, such as cars and base sources, each fell by more than one percent.
People with face masks walk past an Apple store in Beijing. The technology company has said it will miss its quarterly outlook
Oil fell below $ 57 a barrel on Tuesday, under pressure from concerns about the impact on demand for oil from the outbreak.
Forecasters, including the International Energy Agency (IEA), have lowered oil demand estimates in 2020 due to the virus.
“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.
In South Korea, President Moon Jae-in today called for “emergency measures” to address an “emergency situation.”
“The current situation is very serious, even more than expected,” he said.
Moon has demanded action to support companies that depend on trade with China and to encourage consumers to spend more.
Japan has announced plans to use HIV drugs to fight the virus, as the growing number of cases poses an increasing threat to the third largest economy in the world.
As the Japanese economy shrinks, increasing the risk of a recession, the spread of the corona virus has prompted Tokyo to limit public crowds.
In addition, some companies have begun to encourage employees to work at home.
Central banks throughout the region have already started lowering interest rates to help reduce credit when tourists arrive.