Swine flu fears grip world markets
By PAN PYLAS – 5 hours ago
LONDON (AP) — Airlines and travel companies led world stock markets lower Monday as investors worried that a deadly outbreak of swine flu in Mexico could go global and derail any global economic recovery, though pharmaceutical companies rallied on expectations that demand for anti-viral drugs may surge to deal with any pandemic.
Investors are fretting that a flu outbreak could set back already-enfeebled global trade and travel, just at a time when policy-makers around the world have begun sounding more optimistic about the global economy's prospects.
"On top of a synchronized global financial and economic crisis, an outbreak of swine fever is the last thing we need just now," said Neil Mackinnon, chief economist at ECU Group.
By early afternoon London time, the FTSE 100 index of leading British shares was down 41.63 points, or 1 percent, at 4,114.36, while Germany's DAX fell 65.66 points, or 1.4 percent, to 4,608.66. The CAC-40 in France was 44.17 points, or 1.4 percent, lower at 3,058.68.
Wall Street was poised to give up most of the gains it made on Friday. Dow futures were down 129 points, or 1.6 percent, at 7,927, while the broader Standard & Poor's 500 futures fell 13.5, points, or 1.6 percent, to 853.
Earlier, most of Asia's markets were hit by the pandemic fears, with Hong Kong — one of the main focal points of the SARS virus concerns just six years ago — closing down 418.43 points, or 2.7 percent, to 14,840.42. Japan's Nikkei 225 stock average managed a gain of 18.35, or 0.2 percent, to close at 8,726.34 in back-and-forth trade.
Airlines and travel companies took the brunt of the selling amid concerns passengers could hold back from flying for fear of catching the virus, which has already reportedly spread as far as New Zealand.
In Europe, Deutsche Lufthansa AG fell 10 percent, while British Airways PLC was down more than 8 percent. Earlier, Australia's Qantas Airways fell 4 percent while Hong Kong-based Cathay Pacific Airways slid 8 percent.
Travel and hotel companies were also heavily sold off, with British cruise line firm Carnival PLC down more than 7 percent and German travel company TUI AG slid more than 4 percent as it revealed that it was suspending all trips to Mexico City as a precaution amid the outbreak of a deadly strain of swine flu.
While airlines and travel-related companies tanked, pharmaceutical companies enjoyed a modest rally in falling markets amid expectations that demand for anti-viral drugs would rise. Both Swiss drugmaker Roche Holding AG — the maker of Tamiflu — and GlaxoSmithkline PLC, which manufactures the Relenza drug, rose 4 percent.
Mexico officials say the flu strain may have sickened 1,614 people since April 13 but laboratory testing to confirm that and how many truly died from it — at least 22 so far out of the 103 suspected deaths — is taking time.
Worries about the epidemic's spread will likely remain at the forefront of investors' mind over the coming days and overshadowed any hopes generated over the weekend by the announcement from the Group of Seven finance ministers that the worst of the world recession may be over and that recovery may emerge by the end of the year.
"Market worries over a flu pandemic have drawn attention away from ministerial meetings that took place over the weekend," said Stephen Lewis, an analyst at Monument Securities.
Hopes that a recovery of sorts is on its way has helped world stock markets rally off multiyear lows in early March. Despite some range trading over the last couple of weeks, stocks began to rally strongly again at the end of last week, with the Dow Jones industrial average, for example, advancing 1.5 percent to 8,076.29 on Friday.
Elsewhere in Asia, Australia's stock measure gained 0.5 percent while Shanghai's fell 1.8 percent. Markets in Singapore, Taiwan and India retreated.
Oil prices dropped sharply as investors considered comments from OPEC suggesting the price was too low for companies to justify new investments in crude production. Benchmark crude for June delivery fell $2.50 to $49.05. The contract jumped $1.93 to settle at $51.55 last week.
In currencies, the dollar weakened to 96.64 yen from 97.17 yen. The euro traded lower at $1.3125 from $1.3161.
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.
Copyright © 2009 The Associated Press. All rights reserved.
Flu toll rises as virus hits Europe, stock markets
14 hours ago
MEXICO CITY (AFP) — The toll from the Mexican swine flu outbreak escalated Monday as the virus reached Europe and sent shivers through stock markets, despite appeals for calm from US President Barack Obama.
Health Minister Jose Angel Cordova said the number of confirmed and suspected swine flu deaths in Mexico had hit 103, but this did not include seven new deaths reported in Mexico City. The number of suspected cases has passed 1,600.
Europe's first confirmed case was reported in Spain, with dozens more suspected cases being checked in seven EU states and conflicting advice about travel to the Americas from other parts of the world.
Although the United States government has declared a public health emergency, Obama urged people to stay calm.
The swine flu outbreak "requires a heightened state of alert, but it is not a cause for alarm," he told a gathering of the National Academy of Sciences.
Obama added that the US emergency order was "a precautionary tool to ensure that we have the resources we need at our disposal to respond quickly and effectively."
Mexican President Felipe Calderon also called for calm, but confirmed cases outside Mexico now number at least 20 in the US and six in Canada as well as the Spanish victim.
Countries around the world were testing people travelling from the infected areas who showed signs of possible swine flu.
The European Union called an emergency meeting of health ministers and advised against non-essential travel to areas where the deadly virus has surfaced.
Spain is watching 20 suspected cases and Britain 17 while there were five suspicious cases in Sweden, Denmark and Switzerland, plus four in France and one in Italy.
Nine people each in New Zealand and Colombia, plus one each in Brazil and Peru were under observation with flu symptoms, while in the Middle East, a 26-year-old Israeli was also hospitalised in Netanya.
In Geneva, the World Health Organization said it was not calling for travel restrictions.
The UN health agency has warned that the swine flu strain -- apparently born out of a mix of human and avian flu viruses that infected pigs -- could become a pandemic and called for all nations to "intensify surveillance."
The virus particles can be spread through coughs and sneezes. Victims report fevers, coughs and headaches.
Mexico City's streets were deserted after its 20 million residents were ordered to avoid crowds and even kissing, while a football game Sunday at the 105,000-seat Aztec stadium was played behind closed doors.
Residents donned blue face masks and stocked up on food and water in anticipation of a long lockdown as Calderon urged Mexicans to "move fast, but to maintain calm and cooperate with the authorities."
Two of the seven people apparently stricken with the flu on Sunday "arrived (at hospital) in a very bad state" and died shortly afterwards, Mexico City Mayor Marcelo Ebrard said.
Richard Besser, acting head of the US Centers for Disease Control and Prevention, said that the US outbreak so far consisted of eight confirmed cases in New York City, seven in California, two in Texas, two in Kansas and one in Ohio.
The US government announced it will release a quarter of the national stockpile of 50 million doses of the Tamiflu and Relenza anti-viral drugs.
Swiss pharmaceutical group Roche said it was ready to send out more stocks of Tamiflu, some 220 million doses of which are in the hands of governments worldwide.
British pharmaceutical giant GlaxoSmithKline also said it was "urgently" investigating how to boost production of its antiviral drug Relenza, as a race to develop a direct vaccine for H1N1 strain gathered pace.
The outbreak of swine flu spread fear of economic contagion through financial markets and the travel sector.
Airline stocks in particular plunged on worries that governments could impose travel restrictions.
Losses in European and Asian markets were attributed in part to fears of swine flu although Wall Street stocks held steady in early trade.
"Swine flu is ripping through the markets creating uncertainty in its wake," said Manoj Ladwa, senior trader at ETX Capital in London.
After China, Thailand, Indonesia, Russia and Ukraine banned Mexican and US pork imports, US officials insisted it was virtually impossible to catch swine flu from eating meat as long as it is properly cooked.
Authorities across the Asia-Pacific region, which has in recent years been at the forefront of the SARS and bird flu epidemics, stepped up checks at airports and urged the public to be on guard for symptoms.
Copyright © 2009 AFP. All rights reserved.
