World stock markets tumble on China coronavirus fears as analysts see buying opportunities
- Wall Street joined a global sell-off amid rising fears over the coronavirus
- Analysts said adverse market reactions to the impacts of epidemic viruses are usually short-lived
US stocks ended sharply lower on Monday as the deadly coronavirus further spooked markets and China warned the spread of the disease could accelerate. But some market analysts are calling the drop a buying opportunity as the decline is expected to be temporary.
The S&P 500 had dropped as much as 1.6 per cent by the close of trading in New York, while the Nasdaq ended down 1.9 per cent. The Dow Jones Industrial Average fell 1.6 per cent. US markets followed broad declines across major stock markets in Europe and Asia.
Despite the sharp declines, analysts said adverse market reactions to the impact of epidemic viruses are usually short-lived.
“The news of the virus and its continued spread has helped cool the boiling optimism present just a few days ago. But we view this as a buying opportunity,” said Jeff deGraaf, founder of New York-based Renaissance Macro Research.
While hotels have been hit hard by virus-related travel bans, deGraaf said he expects “positive divergences” as the sector sees some recovery since the outbreak was first reported. Biotech stocks are also seen as oversold and could be a good buy, deGraaf said.