The Coronavirus has been hitting news headlines, and the global population continue to worry over fears about the lethal virus spreading.
Investors and businesses have also had a say on the matter, and whether this will have long term implications for business within China as markets seem to have been spooked on Monday.
The death toll of the Coronavirus has hit 81 as of Monday morning, and the UK Health Departments have issued warnings to the British people about the possibility that it could already be inside the UK.
Almost 3,000 people have been diagnosed with the Coronavirus, and the number is only set to rise as the worry of infection spreads across the globe.
Notably, 44 cases of the virus have been detected outside of China with Japan and France being two of the names mentioned.
On Monday, the composite European Stoxx 600 fell 1.7% at the open, London’s FTSE 100 dropped 1.6%, while Germany’s Dax was 1.7% lower.
The slump followed a similarly dramatic decline in Asia overnight. The Shanghai Composite fell 2.7%, the Hong Kong Hang Seng lost 1.1%, and Japan’s Nikkei dropped 2%.
Nigel Green, deVere Group chief executive speaks out as global stock markets have been rattled by the threat of the Coronavirus.
“The Coronavirus is the number one threat to financial markets currently as global investors are becoming jittery on the uncertainty.
“But whilst this health crisis will inevitably hit some sectors, such as travel and retail, most investors who have a properly diversified portfolio should avoid knee-jerk reactions. History teaches us that most issues of this kind have a short-term impact on stock markets.”
He continues: “Most investors should monitor the situation with their financial adviser and sit tight at present. But if it is still escalating next week, with much higher casualty rates, a more defensive approach might be necessary.
“However, the cost and effort of making such a switch means you do not do it lightly, and more evidence is needed that the virus does pose a medium to long term risk to China and the global economy.”
Mr Green goes on to say: “But that said, this should serve as a wake-up call to all investors to ensure their portfolio is well-diversified across asset classes, regions, sectors, even currencies.
“This is the best way to mitigate risks and the best way to be well-placed to take advantage of the opportunities when they occur.”
The deVere CEO concludes: “Stock markets tend to bottom with the peak in new cases during a public health issue of this kind, before rebounding.
“This is a worrying and serious situation and investors must be vigilant. They should remain properly diversified and remain in the market.”
Certainly, the spread of the Coronavirus is a global issue and governments all across the globe will have to make an ensured effort to tackle this. A plan will be needed to limit the spread, and also allow markets to recover on a gloomy Monday.
