Economy

Financial markets unsettled after spread of Wuhan virus

Financial markets are getting more nervous about the risks from a new strain of a Sars-like (Severe acute respiratory syndrome) virus in China.

United States stocks - especially tourism and travel related companies - fell sharply overnight after a case of the coronavirus had been detected in the US.

A handful of other cases have also been identified abroad: two in Thailand, one in Japan, one in South Korea and one in Taiwan. Those infected had recently returned from Wuhan

Asian markets also weakened on news of a growing number of cases.

The threat of a pandemic had implications for New Zealand's number one export earner, the tourism industry.

Forsyth Barr head of research Andy Bowley said it was too soon to say whether the virus would be as disruptive as Sars, which saw inbound traffic from Asia to New Zealand drop by a third at the height of that epidemic in 2003.

"What we've seen historically from these kinds of viruses is subject to how bad the situation becomes," he said.

"You can see a reasonably severe short, sharp negative impact on tourism."

He said listed companies SkyCity Entertainment and Tourism Holdings could be affected if there was a downturn in inbound tourism, in addition to Air New Zealand and Auckland Airport.

Air New Zealand's shares were down close to 2 percent at one point this morning, while Tourism Holdings' was down about 1.5 percent.

SkyCity's and Auckland Airport's shares were little changed.

This article was originally published on RNZ and re-published with permission.

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