FTSE Rebounds but Oil Prices to Drop as Coronavirus Spreads
Reports indicate that as markets closed lats week, FTSE 100 continued its ongoing rebound whilst oil prices fell as coronavirus has spread.
The FTSE 100 has continued its rebound as European markets shook the fear of a coronavirus spread. On the other hand, oil prices have been dropping therefore prompting a sell-off as traders see demand slump.
Yahoo Finance reported the FTSE 100 was optimistic on the spread of the virus after the WHO held out on declaring the outbreak a global emergency. for now, the situation is under wraps and European markets are unshaken.
Connor Campbell, financial analyst at Spreadex, had this to say: “Europe’s major rebound continued unabated on Friday, even if the Dow Jones wasn’t anywhere near as enthusiastic.
“The European indices seemed to shake off the coronavirus concerns that had plagued them for much of the week.”
However, on the oil front prices have been dropping and shares in oil and mining firms have slipped. Brent crude dropped below $58, the lowest price since October 2019.
On close last Friday, Mihir Kapadia, the CEO of Sun Global Investments said: “Oil prices … look likely to end the week down as growing concerns over the Chinese coronavirus will spread, disrupting supply, demand and affecting economic impact…The reason for the rally is as a result of news from the US revealed a drawdown in crude stocks.
“WTI also enjoyed a reprieve by going up 0.5% to $55.86 a barrel, however both could likely end up 4% and 4.6% lower for the week respectively. Oil sell-offs will likely continue as the virus outbreak in China has now killed 25 people and cases are being reported across the globe. As we have seen recently, investors will react quickly to any sign of negativity and this is no exception as China announces that the issue has become an emergency. This could keep oil prices fragile until the coronavirus shows signs of slowing down, and so far that reassurance has not been provided by Beijing.”