The news flow out of China regarding the coronavirus has added another element of uncertainty for investors. For markets, the worry is about the economic impact regionally and globally. After all, China is a huge consumer and exporter of global goods and services.

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While we don’t know just yet how contagious or deadly the virus is, the number of people infected by the Wuhan coronavirus in China has reached 5974, higher than the official cases tallied during the SARS (severe acute respiratory syndrome) outbreak in 2003.

So how do stock markets behave during these virus outbreaks ? We looked at 5 emergencies – SARS in 2003, Avian Influenza in 2004, MERS in 2012, Ebola in 2014 and the Zika virus outbreak in 2016.

The results are as follows:

As the data shows, except the MERS episode in 2012, when the Indian market was higher even as the US markets fell, in all other episodes markets in India fell in tandem with global markets. The extent of the falls ranging between 4-9.5%.

The current Wuhan Coronavirus episode is still developing and it is tough to say for how long new infection cases keep popping up. The Nifty meanwhile is down only around 2% from its all-time high a little over a week ago. So there may be more to go. Ofcourse, any news that patients are responding to medicinal treatment, news of a vaccine, or that containment is working, could turn around sentiment very quickly.

First Published:Jan 29, 2020 2:07 PM IST