Need to Know: These stocks are most at risk from the spreading coronavirus, Jefferies says

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A man kisses his partner goodbye as she leaves to travel home at Beijing Railway station before the annual Spring Festival

Fears over the spreading coronavirus have set into markets. Global stocks, as well as U.S. futures, are tumbling on Monday as the death toll from the virus, which causes respiratory illness, rises and the number of confirmed cases keeps growing. The World Health Organization’s decision not to declare the virus a public health emergency calmed investors momentarily last week, but concerns have quickly returned.

In our call of the day, Jefferies’ global head of microstrategy Desh Peramunetilleke said the virus could be the trigger for markets to “take a breather,” with momentum stocks most at risk and cash and bond proxies the most resilient.

He said there were already parallels with the Sars epidemic in 2003 as the HSI Index has corrected by 3.7% in the past two days, having fallen 9% at the beginning of the Sars crisis.

Peramunetilleke said: “During the 2003 Sars crisis, the Hong Kong-listed stocks that corrected the most included hotels, airlines, telecoms and developers. On the other hand, the most resilient ones were insurance, utilities and railroad. Along similar lines, sectors that have been most impacted over the past two days include food retailing, airlines, e-commerce, Macau gaming, restaurants and education — most resilient sectors include pharma, telecoms, healthcare and utilities.

“On a positive note, it took the markets only about two months to recover the losses incurred over the SARS affected period.”

Jefferies’ chief global equity strategist Sean Darby said investors will also be looking to the timeline of the Sars epidemic in 2003 for clues as to how coronavirus may affect stocks.

He said: “The maximum panic appeared around the WHO Global Health alert while markets bottomed as the WHO began to lift travel bans.”

Stat of the day

The number of confirmed cases of coronavirus has risen above 2,800, while the death toll has hit 81, China’s National Health Commission and state media said late on Sunday. Wuhan Mayor Zhou Xianwang said that five million people had left the city before travel restrictions were imposed to contain the virus.

The tweet

The buzz

The world has paid tribute to NBA legend Kobe Bryant, who died in a helicopter crash on Sunday aged 41. The former Los Angeles Lakers player’s 13-year-old daughter Gianna was also among the nine people killed in the crash, according to reports.

The U.S. now has five confirmed cases of coronavirus, all in people traveling back from Wuhan — the city at the center of the outbreak — after two new cases were reported on Sunday, health officials said.

Hillary Clinton launched a blistering attack on Facebook FB, -1.06%, calling Mark Zuckerberg “Trumpian” and “authoritarian,” and accusing the social media platform of intending to re-elect President Donald Trump.

Singer Billie Eilish was the big winner at the Grammys on Sunday, scooping five awards. The ceremony, held in Los Angeles, also featured tributes to the late Kobe Bryant.

The market

After closing 170 points down on Friday, the Dow Jones Industrial Average DJIA, -1.12% was 1.4% lower on Monday morning, while the S&P 500 SPX, -1.13%   also fell 1.4% and the COMP, -1.43%  slid 1.7% as fears over coronavirus escalated. Most Asian markets were closed for the Lunar New Year holiday but the Japanese Nikkei NIK, -2.03% fell 2% overnight, while European markets fell sharply in early trading.

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