Stocks, oil sink over fears of economic impact of deadly virus
CGTN

Shares tumbled on Monday as investors grew increasingly anxious about the economic impact of China's new coronavirus outbreak, with demand spiking for safe-haven assets such as the Japanese yen and Treasury notes.

Japan's Nikkei average slid 2.0 percent, the biggest one-day fall in five months.

Both main oil contracts tumbled more than two percent on Monday to extend last week's sell-off.

The flight to safety saw the yen rally against the dollar, with the unit now up more than one percent from eight-month lows touched earlier this year.

Traders work on the floor of the New York Stock Exchange in New York City, U.S., January 21, 2020. /VCG Photo

Traders work on the floor of the New York Stock Exchange in New York City, U.S., January 21, 2020. /VCG Photo

Gold, another go-to asset in times of turmoil and uncertainty, is heading back towards 1,600 U.S. dollars and the six-year peaks touched at the start of January.

"With most Asian markets closed, fast-money investors are buying risk-off hedges like Treasuries and selling the Nikkei," said Masahiko Loo, portfolio manager at Alliance Bernstein.

All three major Wall Street indexes closed sharply lower on Friday, with the S&P 500 seeing its biggest one-day percentage drop in over three months.

The S&P 500 lost 0.9 percent, the Dow Jones Industrial Average fell 0.6 percent and the Nasdaq Composite shed 0.9 percent after the Centers for Disease Control and Prevention confirmed a second case of the virus on U.S. soil.

U.S. Treasury prices advanced, pushing down yields further, with the benchmark 10-year notes dropping to a three-and-a-half-month trough of 1.627 percent in early Asian trade.

China announced it will extend the week-long Lunar New Year holiday by three days to February 2 and schools will return from their break later than usual to reduce population flows.

(With input from Reuters, AFP)