The S&P 500 Index fell the most in almost four months, the Dow Jones Industrial Average erased its 2020 gain and the Nasdaq-100 Index had the biggest drop since August. Chipmakers, cruise lines and casino operators were among the hardest hit as investors fled companies with close links to China. A gauge of U.S. equity volatility surged above its one-year average. European and emerging-market shares slid to the lowest since mid-December.

China’s financial markets will remain closed until Feb. 3 after authorities extended the Lunar New Year break by three days as they grapple with the virus crisis. Assets that track the country’s largest stocks took a nosedive, with the iShares MSCI China ETF and Invesco China Technology ETF dropping more than 3.5%. China-based Alibaba Group Holding Ltd. and Yum China Holdings Inc. also slid. The offshore yuan sank, breaching key technical levels.

The flight to safety, which comes ahead of this week’s Federal Reserve meeting, saw volumes in Treasury futures jump to double their regular levels in Asia. The yield on 10-year U.S. bonds dropped to the lowest since October, while the dollar rose. The Swiss franc, the Japanese yen and gold paced gains in haven assets. Oil slipped to a more than three-month low, copper had its longest slump since 2014 and iron ore tumbled.

Fears that China has failed to contain the pneumonia-like virus – which has killed at least 80 people and infected more than 2,700 – roiled markets at the start of a week jam-packed with corporate earnings. The outbreak has shattered a calm in markets that hasn’t seen a 1% up-or-down move in the S&P 500 since early October.

“This is now a sell first, ask questions later situation,” said Alec Young, managing director of global markets research at FTSE Russell. “Markets hate uncertainty, and the coronavirus is the ultimate uncertainty – no one knows how badly it will impact the global economy. China is the biggest driver of global growth, so this couldn’t have started in a worse place.”

As global shares sell off, JPMorgan Chase & Co. strategists say this could end up a buying opportunity. They retained a constructive view on world equities, adding that in the past, the more stocks have fallen on similar fears, the more they have rebounded later. Both the S&P 500 and MSCI All-Country World Index surged to records this month as 2020 started on a jubilant note amid optimism over the U.S.-China trade deal.

“We thought the markets were overdue for a pullback,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, told Bloomberg TV. “Valuations are extremely stretched right now and positioning is extremely euphoric. We’ve said that if the right catalyst came along, markets would be ripe for a pullback.”

Here are some events to watch out for this week:

– – –

– Tech giants Apple, SAP, Facebook, Samsung and South Korean chip maker SK Hynix announce earnings, as do Boeing, International Paper, GE, United Technologies, Lockheed Martin, Caterpillar, Unilever, Exxon Mobil, Shell and Chevron.

– Fed policy makers are expected to open 2020 the same way they closed 2019 – by holding interest rates steady Wednesday.

– Goldman Sachs will hold its first-ever Investor Day on Wednesday.

– The BOE meeting is highly anticipated Thursday after a series of dovish comments raised speculation policy makers could lower interest rates.

– The U.S. reports fourth-quarter GDP Thursday.

– The U.K. is scheduled to leave the European Union on Friday.

– – –

These are some of the main moves in markets:

Stocks

– The S&P 500 slid 1.6% as of 4 p.m. New York time.

– The Stoxx Europe 600 Index sank 2.3%.

– The MSCI Emerging Market Index fell 1.5%.

Currencies

– The Bloomberg Dollar Spot Index rose 0.2%.

– The euro was little changed at $1.102.

– The Japanese yen appreciated 0.4% to 108.88 per dollar.

Bonds

– The yield on 10-year Treasuries slid nine basis points, to 1.60%.

– Germany’s 10-year yield dipped five basis points, to -0.39%.

– Britain’s 10-year yield declined five basis points, to 0.508%.

Commodities

– The Bloomberg Commodity Index decreased 1.4%.

– West Texas Intermediate crude dipped to $53.14 a barrel.

– Gold rose 0.3%, to $1,583.70 an ounce.

He added that his estimate on the loss was based on the number of Chinese arrivals in Thailand of around one million per month with approximate spending of Bt50,000 per head.

The virus has resulted in a decline in the number of Chinese arrivals as China recently banned overseas group tours. This will hurt airline, hotels and resort businesses as well as the sales of souvenir.

When coupled with other negative factors, it will result in the growth of Thai GDP lower than 2.5 per cent this year, he added.

Thai Airways International president Sumeth Damrongchaitham said that the outbreak had affected THAI operations to a certain extent as the carrier operates few routes to China.

Yuanta Securities (Thailand)’s managing director Padermpob Songkroh said:” holding onto cash is the most practical thing to do in the present situation. Also, investors should follow reports on the coronavirus development from the World Health Organisation (WHO). There are many uncertainties regarding the economic direction”.

“Stocks in the electronics sector are the least affected at the moment,” he added.

Meanwhile, Asia Plus Securities said concerns about the economic situation caused the baht to appreciate to Bt30.63 per US dollar on Monday, the highest level in two and a half months.

However, the baht had weakened recently in line with other currencies in the region, due to economic concerns, outbreak of the virus and geopolitical tensions. The Japanese yen appreciated by 1 per cent on Monday, seen as a   safe haven currency by investors.

Weakening of the baht proved positive to stocks relying on exports, such as  food and agriculture, due to higher revenues in dollar term.

Stocks in this group include STA, TU, CPF, KSL, and GFPT.

Stocks of electronic component exporters and power companies also reaped  benefits from the weakened baht, including DELTA, HANA, KCE, and SVI.

For power plant stocks, the weakened baht led to an increase in revenues from  electricity sales as some price calculation formulas are tied to the currency exchange rates.

However, if the baht become weaker at the end of this quarter than the end of the fourth quarter last year, losses will occur from exchange fluctuation.

KGI Securities estimated that the index could fall to its lowest point in mid-February, referring to statistics of the SARS’ outbreak 17 years ago.

“We recommend buying low-risk stocks with high earning stability and outstanding dividends stocks instead of global cyclical stocks,” it said.

Three sectors have been hit hardest by outbreak of the virus: tourism, energy, transportation and airlines with their stocks down by 4.41 per cent 3.37 per cent and 3.31, respectively on Monday.

Meanwhile, Kobsidthi Silpachai, head of capital markets research at Kasikorn Bank said impact on the financial market depended on how fast the virus outbreak could be contained. Many investors pointed to the SARS outbreak in 2002 as a guide, which lasted several months.

The baht was down about 0.4 per cent against US dollar on Monday as investors worried that the virus outbreak could cut into Thai tourism revenue and current account surplus. He said there were many unknown factors that could derail the Thai economy. “Tourism is the last hope beside government spending ,” he said in referring to the delay in the passage of the government budget for fiscal 2020, slow recovery of exports and impact of the virus outbreak on tourism.

China’s efforts to control the coronavirus have led to a ban on all tour groups heading overseas, and shut down transportation in multiple large Chinese cities. Limiting the movement of would-be Chinese customers adds to headaches for Japanese consumer goods companies already hit by a political spat with South Korea. An unseasonably warm winter and an increase in sales tax have also dampened domestic consumption.

“We think that consumption was probably weak in the first place,” said Jefferies analyst Michael Allen, citing the weather and weak winter bonuses. “This just adds to and compounds the issue.”

Faced by an aging population at home, Japan’s consumer goods firms have been expanding overseas – with China a bright spot in that expansion. China is not only home to new, growing markets for stores, but also provides a steady stream of tourists visiting Japan and boosting domestic sales.

The shutdown of major Chinese cities during the usually lucrative Lunar New Year holiday could also affect Japanese businesses that have a footprint in China. Companies such as Fast Retailing Co.’s Uniqlo, cosmetics giant Shiseido Co. and Muji owner Ryohin Keikaku Co. have all built up Chinese operations that make up a sizable proportion of sales.

Shares of Japanese retailers, cosmetics makers and operators of hotels and tourist attractions fell across the board in Tokyo on Monday, the first trading session since the tour ban was announced. The benchmark Topix index fell 1.6%, the biggest daily slide since October.

Fast Retailing closed down 5.7% in Tokyo on Monday, the biggest drop in 18 months, while Shiseido fell 5.5%. Both firms got almost 20% of revenue from China in their most recent fiscal year, according to Bloomberg data, figures which don’t account for goods sold in Japan to Chinese tourists.

Tokyo Disney Resort operator Oriental Land Co., a key beneficiary of the surge in inbound tourism, plunged 7.8%, its worst decline in five years. In addition to the chill surrounding tourism, it was also hit by a local media report that it will announce a profit drop due to bad weather in 2019. Its largest shareholder, train operator Keisei Electric Railway Co., slumped 6.2%.

It’s not yet clear how long the coronavirus’ impact will last, and it’s likely to be a temporary hit that Japanese retailers can bounce back from, Allen said. Some retailers such as drugstores could even benefit from the coronavirus as people scramble to buy masks and medicine.

About 50 of Uniqlo’s 750 shops in mainland China were temporarily closed as of Monday morning, a Fast Retailing spokeswoman said. A Shiseido spokesman said the company wasn’t sure of the extent of the impact of travel restrictions within China on its business, but was aware that many shops carrying the company’s goods were closed in Wuhan.

Aeon Co., Japan’s largest supermarket operator, expects sales from Wuhan area stores to be halved due to the impact of the virus, according to spokesman Makoto Sueyoshi. Aeon closed the three malls it operates in Wuhan, but its five general supermarkets continued to operate on a limited basis to sell daily goods and food. Furniture retailer Nitori Holdings Co. temporarily closed seven stores in Wuhan, and shortened some store hours in other areas including Shanghai and Suzhou, spokeswoman Haruna Muramatsu said.

Coronavirus Seen Hitting Japan’s Economy Harder Than SARS

In Tokyo’s hubs over the weekend, the most immediate impact was seen in bulk-buying of face masks. Overseas shoppers were seen buying masks in bulk in the tourist hotspot of Asakusa, while a post office in Shinjuku was filled with tourists sending masks overseas. Nonetheless, Shibuya’s iconic Scramble Crossing seemed as crowded with visitors as ever.

“People will come back,” said Allen. “The main uncertainty is how long this will last, and markets hate uncertainty.”

_ _ _

With assistance from Bloomberg’s Ayaka Maki, Shingo Kawamoto, Kurt Schussler and Isabel Reynolds.

Global markets took a sharp downturn on Monday as investors grew increasingly anxious about the swift spread of the coronavirus beyond China.

The Dow plunged 450 points, or about 1.5%. Standard & Poor 500 and Nasdaq futures were also down significantly, 1.5% and 2%, respectively.

“Stock markets are selling off this morning on fears that the coronavirus might be harder to contain than previous viral outbreaks,” said Ed Yardeni, president of Yardeni Research. “If the current outbreak turns into a pandemic that significantly disrupts global commerce, the impact would be bad news for the global economy and corporate earnings.”

Even as China has moved to sequester its residents during one of the year’s busiest travel seasons – Beijing has extended the quarantine to more than 50 million people – the mayor whose city, Wuhan, is the epicenter of the outbreak said 5 million people had already managed to leave.

So far, the coronavirus has infected at least 2,800 people in China and killed 81. Health officials say the virus has the potential to be more deadly than the 2002-2003 SARS outbreak, which killed nearly 800 people and infected more than 8,000.

Separate from public health concerns, the economic impact of coronavirus “will be significant,” wrote Michael Farr, president of Farr, Miller & Washington, a D.C. investment firm, in an analyst note. Travel is Asia has already slowed dramatically. And there’s concern that supply chains could be disrupted if, for example, the delivery of auto parts or manufacturing grind to a halt.

“In the global economic fabric, China will cause a measurable slowdown,” Farr said, cautioning that it’s still too early to grasp the virus’ precise impact on global GDP.

There have been five confirmed cases in the United States: two in California and one each in Washington state, Arizona and Illinois. Infections have also been confirmed in Canada, France, South Korea, Japan, Nepal, Thailand, Singapore, Vietnam and Taiwan.

Brad McMillan, chief investment officer at Commonwealth Financial Network, wrote in an analyst note that SARS hit growth in China hard before passing relatively quickly. Most of the damage came from consumers staying in and not spending, so growth picked up once shoppers’ routines returned to normal.

But even while China’s economy, which depends heavily on consumer spending, could suffer, the U.S. is likely to avoid a major blow.

“Over the course of a year, SARS was a nonissue for U.S. investors,” McMillan wrote. “Even if this new disease proves to be much worse than it looks at the moment, here in the U.S. the damage will be limited – and should pass quickly.”

European markets were all in the red Monday, with the FTSE 100 and the DAX trading down more than 2%. Many Asian markets were closed for the Lunar New Year, but the Japanese Nikkei 225 was trading 2% in the red.

Boeing shares were also down 1.5% off reports that a plane had crashed in central Afghanistan. Reuters reported that three Afghan officials said the plane was operated by Afghanistan’s state-owned Ariana Afghan Airlines, but the company’s acting chief executive denied those reports.

Grab Financial Group, the financial arm of Grab, Southeast Asia’s leading “Everyday Everything App”, expects 2020 to be an exciting year in digital finance, with innovations from fintech companies at the forefront.

These are the three trends to look out for this year.

1 Mobile wallet: an accelerator for the cashless journey

According to the Bank of Thailand, between 2014 and 2018, financial transactions via mobile devices and the internet saw an annual increase of 116 per cent. Grab Financial Group forecasts that mobile banking usage will continue to grow, with e-wallet among the most-used platforms.

E-wallets have already become a vital part of Thailand’s national payment infrastructure and a popular alternative to cash for everyday spending, both online and at physical retail outlets. In addition, users can enjoy a wide array of privileges such as special discounts and reward points. These perks can also act as strong motivators for a higher adoption of cashless payments.

Worachat Luxkanalode, Thailand country head of Grab Financial Group, said, “In 2020, mobile wallet usage will not only cover domestic spending but will also expand internationally. We expect to see more banks within the region collaborating on connecting payment infrastructure to enable faster, more convenient, and secure cross-border transactions, while partnerships between banks and technology providers will play an essential role in propelling the development of e-wallet services in Thailand.”

2 Digital nano-finance: an alternative for more inclusive access to personal loans

Digital lending is among the most highly-anticipated financial services in the past few years, as this innovation allows financial institutions to use alternative data to more accurately assess the credit of borrowers, particularly the underbanked, such as temporary workers and freelancers.

2020 will be the year of digital lending execution, given the increasing technological readiness and supportive regulatory environment in Thailand. Financial institutions will be able to answer the needs of more varied customer segments. Players with more comprehensive and predictive credit scoring models and resources dedicated to delivering seamless customer journey will most likely come out tops in this competitive climate.

Grab Financial Group has piloted the Nano-lending programme for driver-partners in the later part of 2019. Worachat added, “Along with the rise of digital lending, we expect to see another trend emerging: utilising technology for debt collection. By digitising the collection process, lenders can benefit from improved efficiency whereas borrowers will be able to select customised instalment repayment methods that match their ability to pay.”

3 Comprehensive financial solutions for businesses: a key to unlocking MSMEs’ potential

Access to funding is one of the primary barriers for micro-entrepreneurs. This customer segment often lacks official financial statements and therefore overlooked by large financial institutions. As a result, currently available SME solutions are usually designed for medium-sized enterprises which automatically exclude micro-entrepreneurs from opportunities in expanding their businesses.

Worachat stated: “Fintech companies have the capacity and the expertise to fulfill the needs of this entrepreneur segment. These technology providers have both digital customer insights and agile business operations that allow them to create optimal financial solutions as well as related value-added services, such as payment systems, sales tracking, and marketing campaigns.”

With 93 per cent of small and medium-sized business owners in Thailand expressing an interest in using more comprehensive financial services, MSME solutions are likely to experience high growth in 2020. This advancement can also contribute to the development of a national database with a more in-depth perspective of micro-entrepreneurs in the future.

2020 will be a highly dynamic year for digital finance businesses, with fintech and small to large non-bank players looking to capitalise on emerging opportunities from the more flexible regulatory framework and the rising demands from micro-entrepreneurs and the underbanked. “Technology is an immensely powerful tool in responding to different financial needs. This year, with our commitment to providing more inclusive solutions, Grab Financial Group will continue to deliver innovative products and services to uplift the livelihoods of both our partners and users, along with driving Thailand’s economy,” concluded Worachat.

Somkid made the remark during his visit to the National Broadcasting and Telecommunications Commission (NBTC) headquarters on Pahonyothin Road for a briefing on the development of the new technology.

Accompaning Somkid were Minister of Digital Economy and Society Puttipong Punnakanta, and executives of private and state telecom operators.

The NBTC will hold an auction of four spectrum bands on February 16 for the 5G wireless broadband service. As of January 27,five companieshad picked up the bid documents.

Somkid said 5G could help drive the country’s competitiveness and efficiency in the industrial sector as well as attract foreign investment.

NBTC must ensure the public has easy access to the service, he added.