Asian Markets Fall on Coronavirus | Sydney Airport

23 January 2020

 

Global markets retraced overnight, as US equities were mixed, dodging the losses that took hold in Europe and Asia as investors grappled with worries that a deadly virus in China might undercut economic growth. At the same time, President Donald Trump said he expects a deal with Europe on auto tariffs.
 
Asian markets were hit hard on Tuesday, on the back of the unfolding coronavirus outbreak from China. There are growing fears that the SARS-like virus outbreak in China could develop into a full-blown rerun of the SARS crisis 17 years ago – after the World Health Organisation called an emergency meeting, although it is clearly very early to tell. A CNN report is also suggesting the first case of Coronavirus has reached the US. Six deaths have so far been reported in China. China’s Lunar New Year holidays commence later this week, which will see a large amount of Chinese travel.  Travel-related stocks across Australia & NZ took a hit on the fresh reports that the Wuhan virus is spreading quickly as it can be transmitted between humans.

 

Stock in Focus: Sydney Airport (SYD:ASX)

SYD shares were lower yesterday on the back of growing virus concerns discussed above. Sydney Airport is starting to screen passengers on flights from the Chinese city of Wuhan, which is believed to be ground-zero for the illness. A Brisbane man has been quarantined with the suspected coronavirus while Australian border security officials and NSW Health will be stationed outside three regular flights from Wuhan to triple-check the health of all passengers.
 
 
SYD also released its latest set of traffic numbers, which were sound overall. “When you look at the different nationalities coming through the airport, the growth we’ve had in a number of key markets like the US and India has helped offset the slowdown from places like the UK throughout 2019,” said its CEO Geoff Culbert, who also said trading conditions were currently the toughest in a decade.

There are media reports that tourists, especially those from the US, are cancelling their holidays down under due to the devastating bushfires. These two factors could be material near term risks for Sydney, although it is very early to make judgments around the Coronavirus situation/potential impact.
 
We currently have a BUY rating on SYD.
Members should look out for a full update on SYD to be released in our weekly report.

 

 

   
Australia & New Zealand Market Movers

The Australian market was lower on Tuesday (ASX 200 index -0.19%) as the ASX ended a 5-day rally. Losses were led by the technology sector, while an operational update from mining giant BHP failed to inspire the market. Consumer staples was the only sector to make reasonable progress on Tuesday, boosted by gains among the major grocers and dairy product providers.
 
 
The New Zealand market rebounded yesterday (NZX 50 index +0.50%) as the resilient local market provided an attractive harbour for investors anxious about the spread of coronavirus in China – which saw Auckland Airport and Air NZ shares take a hit. Defensive stocks such as utilities and property companies led the gain.
 
 

3 Things Markets Will be Watching this Week

  1. US Earnings season is underway with companies reporting 4th quarter 2019 profit results.
  2. The European Central Bank has a meeting on Thursday.
  3.  Australian employment data is also published on Thursday.

Have a Great Day,
 

Team

Asian markets were hit hard on Tuesday, on the back of the unfolding coronavirus outbreak from China. There are growing fears that the SARS-like virus outbreak in China could develop into a full-blown rerun of the SARS crisis 17 years ago.

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