It will be a slow start to dealing on the ASX today after a soft end to the week in futures trading on Friday night.
Eurozone shares fell 0.3% on Friday and the US S&P lost 0.5% on renewed concerns about the impact of the coronavirus outbreak on the growth outlook with the Fed warning that it poses a “new risk” (which is not new news).
Various global companies in airlines, manufacturing, retailing (such as Apple and Deere, Fiat Chrysler, Star Bucks, Yum China) have temporarily halted operations in China.
Chinese inflation data for January as well as car sales (expected to plunge) and bank loans are due to be released this week and provide some detail to the conjecture about the impact of the virus.
Despite the soft global lead, ASX 200 futures rose 7 points or just 0.1% pointing to a flat to slightly up start to trading for the Australian share market today.
That was after the ASX fell for the first time in four sessions on Friday, dragged lower by steep falls in the energy and materials sectors amid renewed concerns about coronavirus crisis.
The ASX 200 fell 26.6 points fell, or 0.4% to 7,022.6 points, trimming its advance for the week to 0.1%.
Prior to Friday’s slide, the local market had risen 1.8% in the previous three sessions, helping to recover that big loss on Monday when Chinese markets re-opened after the Lunar New Year break.
Economists think the Australian economy is likely to at least see a 0.2% to 0.3% GDP hit from virus because of reduced tourist, education and resources earnings, on top of a 0.3% hit from the bushfires, will see growth dip close to contraction this quarter.”
S&P Global Ratings warned that Chinese economic growth will slow sharply to 5% this year (from 6.1% in 2019). Given the size of the Chinese economy, it said this will likely have a “material effect on global growth”.
“The global impact will be felt through … sharply reduced tourism revenues, lower exports of consumer and capital goods, lower commodity prices, and industrial supply-chain disruptions,” said Shaun Roache, Asia-Pacific chief economist at S&P Global Ratings.
