US stock futures drop 1% on Coronavirus scare

Risk-off is in full swing in Asia with the S&P 500 futures reporting a 1% drop.
Oil prices and other major equity markets are also flashing red.
Coronavirus fears have intensified and the resulting flight to safety is boding well for anti-risk assets.

Omkar Godbole FXStreet Contributor

US stock futures and crude oil are flashing red in Asia, while the anti-risk assets are better bid on fears China is struggling to tame coronavirus.

The futures on the S&P 500 are currently down 1 percent at 3,259 and oil benchmarks - WTI and Brent - are shedding 2.4 percent.

Stocks in Asia are also flashing red with Japan's Nikkei reporting a 440 point or 1.87% drop and China A50 futures shedding more than 3%. European stocks are expected to open on a negative note, as futures on the Euro Stoxx 50 index are trading with a 0.90% loss at press time.

Meanwhile, the Japanese yen, a safe haven, is pushing higher against most majors. The currency gapped higher against the US dollar in early Asia. Gold, also a safe haven is also gaining ground, now trading at $1,583 per Oz, representing a 0.70% gain on the day.

Coronavirus scare

China announced an unspecified extension to the weeklong lunar new year holiday, exacerbating worries the coronavirus outbreak could severely disrupt the Chinese economy.

As per Bloomberg, the death toll from the virus has risen to at least 80, and confirmed cases in the US rose to five on Sunday.

Possible adding to the risk-off tone are media reports stating the US Embassy in Iraq's capital Baghdad was hit by 3 rockets in the early hours of Monday. The risk-off mood will likely worsen, sending stocks deeper into the negative territory and oil prices higher, if tensions in the middle east escalate.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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