Markets Live, Wednesday, 5 February


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Markets seem to be adopting a more hopeful view towards the coronavirus outbreak. Despite the still steady flow of reports of travel restrictions and business shutdowns, market participants appear more comfortable with the notion that the virus’ spread, and therefore it’s impacts to global economic growth, has been contained.

The VIX dropped once again in US trade overnight, to still remain relatively elevated, but closer nevertheless to levels suggesting a market environment conducive to risk taking. US and European stocks rallied considerably last night, during what was a day of high market activity. The benchmark S&P500 climbed back above the 3300 mark, lead by a considerable rally in tech stocks.

The strength in US tech pushed the NASDAQ towards fresh record highs. A notable mention: Tesla shares continue to surge, breaking through the $US900 mark last night. It’s share price has almost quadrupled since the lows it hit in August last year.

Chinese policymakers proved their willingness to throw the kitchen sink at the country’s financial markets, in a bid to settle some of the panic that’s characterised market activity in China this week.

Backing up Monday’s extraordinary efforts, the PBOC pumped in another rough 400b Yuan of liquidity into the financial system, and directed some of the country’s largest insurers to buy up Chinese equities, in order to sure-up prices, and contain any potential run on the stock market.



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