Mining

Fears of coronavirus pandemic batters big miners, but gold hits three-week high

MINING shares were among the sectors worst hit by fears that China was failing to contain the coronavirus outbreak in which 80 people have so far died, said Bloomberg News.

The Stoxx Europe 600 Index tumbled about 2%, with miners, airlines, luxury-goods makers and tech stocks taking a serious beating. All industry group were in the red, signaling just how worried traders are, the newswire said.

“Fear is the name of the game,” said Stephane Ekolo, an equity strategist at TFS Derivatives in London. “Market participants are taking some risks off the table as they are afraid of the potential economic implication of the virus outbreak.”

Mining shares slid 4.1%, their biggest drop on since August.

Large diversified miners such as Anglo American, BHP Group, Glencore and Rio Tinto paced the retreat, alongside steelmakers ArcelorMittal and Evraz, as base metals tumbled on concerns that the spread of the coronavirus will weigh on demand, with China being the world’s largest consumer of commodities, the newswire said.

“This is now a sell first, ask questions later situation,” Alec Young, MD of global markets research at FTSE Russell told Bloomberg News.

“Markets hate uncertainty, and the coronavirus is the ultimate uncertainty – no one knows how badly it will impact the global economy. China is the biggest driver of global growth, so this couldn’t have started in a worse place,” he said.

However, the gold price was stronger, said Reuters. Gold jumped 1% on Monday to a near three-week high as growing concerns that the coronavirus outbreak could impact the global economy pushed investors towards safe havens, it said.

“Risk aversion is pushing up gold prices. Weekend news showed that (the coronavirus) is still spreading in many countries across the globe and this could impact economic activity and market sentiment,” Commerzbank analyst Carsten Fritsch said.

The post Fears of coronavirus pandemic batters big miners, but gold hits three-week high appeared first on Miningmx.

Source: miningmx.com

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