Global Stocks Drop As Apple, Others Share Grim Outlook Due To Coronavirus Outbreak

Markets in Asia and Europe dipped in Tuesday’s trading session as Apple Inc. AAPL became the latest company to downgrade earnings guidance due to the novel coronavirus (COVID-19) outbreak.

What Happened

Day-to-day activities continue to be disrupted in mainland China with at least 72,436 cases of the virus confirmed by local authorities as reported by state-run Xinhua News Agency, including 1,868 deaths.

The number of the new cases has slowed down, compared to last week's pace, with 1,886 new cases and 98 deaths confirmed on Monday.

Apple on Monday said that while business in China is resuming, it’s not at the pace or level it originally expected. The company downgraded the expectations for the second-quarter without pinning on a specific number, as it continues to watch for the impact of the virus.

This comes less than a week after Tesla Inc. TSLA expressed similar sentiments in a regulatory filing with the Securities and Exchange Commission. Other major global corporations, including Alphabet Inc. GOOGL GOOG and Starbuck Corporation SBUX, continue to be similarly impacted.

London-based HSBC Holdings p.l.c. HSBC said that it is expecting a loss in revenue in the first quarter of this financial year due to the outbreak.

Moody’s analysts on Tuesday downgraded the economic outlook for the Asia-Pacific region due to the reduced global trade, as reported by CNBC, in particular for China, where it now expects the gross domestic product to grow at 5.2% this year, down from the previous 5.8%.

The airlines business also continues to see the impact of reduced demand. Singapore Airlines Ltd. said it is canceling its flights on some of the major routes connecting Europe and the United States to Asia till May as it watches for developments.

Progress on some of China’s key economic projects, including the Belt and Road Initiative is also stagnated, as reported by Reuters.

Asia Stocks

Markets in Asia traded mostly lower on the negative economic outlook, even though stocks in China were slightly up.

Shanghai Composite index closed 0.05% higher at 2,984.97. with Shenzhen Component up 0.58% at 11,306.49.

Hong Kong's Hang Seng Index dropped 1.54% at 27,530.20.

Japan's Nikkei 225 was 1.40% lower at 23,1932.80; South Korea's KOSPI dropped 1.48% to 2,208.88.
India's NIFTY 50 was trading 0.80% lower, while SENSEX 0.76% lower at press time.

Singapore's Straits Times Index was down 0.50% at 3,196.50.

Europe Stocks

Germany's DAX Performance Index traded 0.77% lower at 13769.84 The United Kingdom's FTSE 100 was down 0.83% at 7371.26.

France's CAC 40 was down 0.45% at 6,058.44, while the Netherlands' AEX index traded 0.86% lower at 623.78.

The Eurozone's overall Stoxx 50 index was down 0.52% at 3,833.34.

US Futures

The U.S. futures hinted at a lower market open for Tuesday.

Nasdaq 100 futures were down nearly 0.54% at 9,580. Dow Jones futures traded 0.48% lower at 29,254. S&P 500 futures were down nearly 0.37% as well at 3,368.50.