The FTSE 100 and other European stock markets have opened slightly higher, despite China’s Shanghai index plunging almost eight per cent over the coronavirus outbreak.
The UK’s blue-chip index had climbed 0.3 per cent by 8.30am, Germany’s Dax was also 0.3 per cent higher, while France’s CAC 40 had risen 0.2 per cent.
Europe’s gains came in stark contrast to China, where the Shanghai composite index finished 7.7 per cent lower on its first day of trading since the Lunar New Year holiday began on 23 January.
As of Sunday, the coronavirus death toll was 361 and the number of infections stood at around 17,200. When Chinese markets last traded, the death toll was 17 and the infection number 600.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said the sell-off in China was to be expected given the length of time the markets have been shut. He said it “represents more of a catch-up” than new fears over the virus.
“If anything, we think the magnitude of the sell-off appears less severe than market bear cases ahead of the open,” he said.
European markets recovered somewhat this morning after a bruising day on Friday which saw the first reported cases in the UK and infections rise on the continent.
Today was also the first trading session since the UK exited the European Union, marking a new chapter in relations between the two sides.
Prime Minister Boris Johnson is due to lay out his plans for trade negotiations with the bloc at 11am. He is expected to say the UK will pursue a looser, Australian-style trade deal rather than one which aims for close alignment.
The pound opened lower against the dollar and was down 0.6 per cent by 8.30am at $1.313. Its fall helped boost the FTSE, making the overseas earnings of blue-chip firms worth more.
Bethel Loh, macro strategist at trading platform Think Markets, said: “Brexit noise should start to play into GBP/USD and EUR/USD price action as investor expectations begin forming around transition period soundbites.”