Swine fever sends world markets reeling
The spread of swine fever hit the world’s markets on Monday, sending US futures and Asian stocks downwards and threatening recovery
Markets worldwide have reacted with increasing panic to the worldwide spread of swine fever. The outbreak began in Mexico, which has 20 confirmed cases but has since believed to have spread to other countries including the US and is also expected to reach the UK.
Futures on the US Standard & Poor’s 500 Index fell nearly two per cent, reversing earlier gains as worries over the effects of the virus on the world economy began to concern investors. Asian stocks slid too and market participants flocked towards the safety of government bonds and the yen.
The flight to safety came as the cases of swine flu spread in Mexico and the US, prompting the American government to declare a public health emergency and release medicine onto the market.
Asian countries were among the first to act, with Japan, Singapore and Malysia starting to screen air passengers and Hong Kong raising its response levels.
With worries growing that the outbreak would slow the global recovery and dent air travel and tourism Air China shares collapsed 13 per cent, Australian flag carrier Qantas Airways lost 5.1 per cent and Asia’s biggest listed casino group Genting slid 4.9 per cent.
Meanwhile drug companies were among the few to benefit, with shares in Chugai Pharmaceutical, the Japanese arm of Roche, jumping 14 per cent.
WHAT THEY ARE SAYING
Leo Lewis & Dominic Walsh, the Times: “The news will revive memories of the 2002-03 severe acute respiratory syndrome (Sars) outbreak. Although the disease, first noticed in southern China in November 2002, was short-lived, it caused the deaths of 774 people worldwide and had a devastating impact on the Asian economy - particularly in Hong Kong - and on the shares of many international companies with an economic interest in the Far East.”
Gautam Naik & Betsy McKay, Wall Street Journal: "Spurred by the deadliness of both severe acute respiratory syndrome, or SARS, and Asia's tussle with avian flu, the WHO in recent years has ratcheted up its global pandemic preparations. The agency and various governments have adopted new international health regulations, improved communication links and boosted stockpiles of antivirals both regionally and internationally. The WHO has stockpiled five million courses of Tamiflu."
Rob Cox, on Breakingviews.com: "Even assuming the Mexican flu strain is no more deadly than SARS, it comes at a fragile moment. The financial crisis and resultant economic contraction is already taking heavy casulties on the businesses and economies most dependent on trade, transportation, tourism and lodging, which are most susceptible to the flu bug. Moreover, governments everywhere are managerially challenged, what with bank bailouts and hige stimulus packages to fund.....For the sake of the global economy - and the human race - this had better be a flu that can be easily contained." ·
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