The Coronavirus and its impact on markets
Investors: keep watch, keep calm
Despite the rightly mounting concern about the spread of the Coronavirus, as mentioned above, there is reason to believe that the threat will be contained and managed, but it could take some time with epidemics usually taking 6-18 months to run their course The rapid and widespread response from the Chinese government, and mobilising of countries outside China to detect and contain cases of the virus which have crossed their borders are important steps in containing the virus. Markets have been impacted by similar situations before, like SARS, and have recovered but the concern about the spread of the Coronavirus will keep investors cautious and markets volatile in the near-term given the disruption to economic activity. Once it becomes more evident that the number of people infected has reached a peak, markets tend to take this as a positive signal.