Selloff intensifies, as airlines bear the brunt of travel fears

European markets are following their Asian and US counterparts lower, as the fears over the potential economic impact of the coronavirus sends traders running for shelter. Meanwhile, travel stocks are also under the microscope.

  • Market selloff brings weekly decline of historic proportions
  • Travel companies under pressure as demand slumps
  • Central banks gear up for action, but are their tools blunt to fight a virus?

Market panic intensifies

Global stock markets are in panic mode today, as heightened fears over the potential economic implications of a global coronavirus pandemic send traders running for shelter. The selling seen over the course of this week has reached historical levels, with the Dow currently on course to post the seventh-biggest weekly decline on record. While traders are convinced over the risk of holding stocks, they are less consistent when it comes to choosing where to park their assets.

The lacklustre gold performance overnight saw traders shift into the yen, with the currency seemingly back in the driving seat as the number one haven in the forex market.

JP Morgan advice for employees to avoid non-essential travel is an early insight into how things could progress if the virus continues to spread throughout the western world.

Virus news travels fast

The travel sector will certainly be in the limelight in the event of further travel restrictions. While declining oil prices could help lower business costs, the prospect of a slump in demand is hitting the travel sector hard. Updates from IAG and easyJet acknowledge the decline in demand that has already started to emerge, with IAG planning to cut routes across their European short-haul network in the coming days.

Time for intervention?

This morning has seen central banks take tentative steps to assure markets of their willingness to intervene where necessary. While expectations of a Fed rate cut grow, comments from ECB member Vasiliauskas point towards a possible extraordinary governing council meeting if required.

However, beyond helping to alleviate the current stock market collapse, there is little any central bank could do to alleviate the potential repercussions of a global pandemic.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 40
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.