Pharmaceutical stocks surge as China comes under an outbreak of a new Coronavirus strain

By: Michael Harris
Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to… read more.
on Jan 20, 2020
Updated: Mar 11, 2020
  • China comes under an outbreak of a new Coronavirus strain.
  • Pharmaceutical companies' stocks rise following the news.
  • China reports 139 new cases of Coronavirus over the weekend.
  • Chinese authorities claim that the outbreak is preventable and controllable at the moment.

As per the recent news, China has been hit by a new Coronavirus strain that is now branching into more than one city. Following the outbreak, Chinese drug and face mask manufacturers saw a sharp increase in the stock market.

Shandong Lukang Pharmaceutical, Jiangsu Sihuan Bioengineering, and Shenzhen Neptunus Bioengineering were among the top drug manufacturers that saw an around 10% increase in their share prices following the news. 10% marks the daily limit for all of these stocks.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

On the other hand, face mask manufacturers like Tianjin Teda and Shanghai Dragon also posted a sharp gain in the stock market with the former printing 9.89% surge while the latter hit the 10% daily mark.

139 New Cases Were Reported Over The Weekend

Chinese authorities announced on Monday morning that as many as 139 news Coronavirus cases were reported over the weekend. The outbreak was first reported in Wuhan, however, three of the recently reported cases were from outside which confirmed that the virus is now penetrating into the other cities. In a previous announcement on Sunday, China’s National Health Commission declared that the experts currently see the outbreak as preventable as controllable.

According to the Center for Global Health Science and Security faculty instructor, Alexandra Phelan, at the Georgetown University:

“What has been evident by the most recent statistics that have come out overnight, is that it is highly likely that we have this human-to-human transmission occurring. We’re now starting to get a sense that perhaps given the scale we might have more sustained or less-clustered, more efficient human-to-human transmission, and that’s really what we’re looking out for because that is what tells us whether a disease is going to spread more rapidly between people.

WHO Data Shows 800 Reported Deaths During The 2002-2003 SARS Outbreak

The World Health Organization categorizes coronaviruses as a broad family of viruses that is known to cause the likes of a common cold that is not very likely to be severe. On the other hand, however, the more severe healthcare complications like severe acute respiratory syndrome (SARS) and the Middle East respiratory syndrome is also associated with the strains of Coronavirus.

The WHO data further highlighted that the 2002-2003 outbreak for SARS had reported 800 deaths with most of them occurring in Hong Klong or China. Despite the surge in healthcare companies in the stock market, the recent outbreak is a matter of grave concern for China with authorities dedicatedly working to contain the spread of the disease.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
67% of retail CFD accounts lose money