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By Peter Nurse
Investing.com – European stock markets are set to open lower Thursday, weighed by losses in Asia as the battle to contain the spread of a deadly virus intensifies.
At 02:15 ET (0715 GMT), the contract traded 9 points, or 0.1% lower. France’s were down 14 points, or 0.2%, while the contract in the U.K. fell 10 points, or 0.1%. Futures on the pan-eurozone , slipped 4 points, or 0.1%.
In China, the fell 2.8% and the dropped 3.6%. Hong Kong’s lost 2%.
Earlier Thursday, China issued a travel suspension in Wuhan, a city of 11 million at the center of the outbreak of the coronavirus, as its latest attempt to stop the spread of the disease that has killed at least 17 people and infected hundreds of people in China, and as far afield as the U.S., Thailand, Taiwan, Japan and the Republic of Korea. This has sparked fears of a pandemic.
Wuhan is a major transportation hub with roads and railways connecting it to the rest of the country and is often referred to as the Chicago of China, Robert Carnell, Chief Economist, Asia-Pacific at ING, said in a research note. In 2018, Wuhan produced GDP of $224 billion.
“In China at least, and for sure in Wuhan, the economic impact of the disease is now manifesting itself not just in households’ precautionary behavior, but in the authorities’ quarantine efforts,” Carnell added.
However, the World Health Organization postponed a decision over whether to declare the virus a “public health emergency of international concern,” which might merit a coordinated global response.
The organization’s emergency committee met Wednesday in Geneva, but decided more information was needed. It is expected to take up the matter again on Thursday.
“This is an evolving and complex situation,” said Tedros Adhanom Ghebreyesus, director-general of the WHO, in a briefing with reporters in Geneva.
“Today, there was an excellent discussion during the committee meeting, but it was also clear that to proceed we need more information,” he added.
Aside from news from Asia, the meets later Thursday and is widely expected to keep interest rates on hold–at -50 basis points and 0 bp for the deposit rate and the main refinancing rate, respectively–and quantitative easing at 20 billion euros ($22 billion) a month.
The main focus will be on the strategic review promised by ECB President Christine Lagarde, in her second meeting in this role.
“We expect her to give more details as to the parameters that will be included in the review,” according to analysts at Nordea, in a research note, “but she will not jump to any conclusions ahead of the process.”
In corporate news, STMicroelectronics (PA:) will be in focus Thursday after the European semiconductor chip maker said that net profit for the fourth quarter fell year-on-year, while revenue rose amid higher sales.
Elsewhere, the price of oil has retreated sharply after the American Petroleum Institute reported that crude inventories rose last week, by 1.6 million barrels, adding to the picture of an oversupplied market. Official government data are due at 10:30 AM ET.
At 2:15 AM ET (07:15 GMT), futures traded 1.7% lower at $55.78 and the international benchmark contract fell 1.4% to $62.31. for February delivery on New York’s COMEX was flat at $1,556.40.
