Stock markets hit record highs, coronavirus hit on Chinese economy “will be limited”

Markets rose on Tuesday.

The S&P 500 rose 0.2 percent to a record high, the STOXX Europe 600 rose 0.9 percent to also hit a record high, and the Shanghai Composite rose 0.4 percent.

Even as the death toll from China's coronavirus outbeak continues to rise, Mike Loewengart, vice president of investment strategy at E-Trade, said that some investors “brave enough are stepping back into the market as they feel the selloff was overdone at the start of the situation”.

Indeed, Shane Oliver, head of investment strategy and chief economist at AMP Capital Investor, said that based on available data, “the hit to the Chinese economy in the current quarter will be limited”.

In contrast, Richard Grace, senior currency strategist and head of international economics at Commonwealth Bank of Australia, said that the “risk of a larger downgrade in Chinese GDP growth over Q1 20 and 2020 as a whole is gaining momentum” and therefore, “the risk of a larger downgrade to global growth is clear”.