China Calms Coronavirus 2nd Wave Fears by Lowering Highest Alert

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China Calms Coronavirus 2nd Wave Fears by Lowering Highest Alert
  • China’s Hubei Province is reducing its pandemic threat level from tomorrow.
  • The province has seen no new coronavirus cases in 27 days, reducing fears of a second wave.
  • Market sentiment is likely to become more bullish as a result.

China is lowering its pandemic threat level. From tomorrow, Hubei Province will reduce its emergency response from the highest to the second-highest level. This comes as the province also announces that it hasn’t faced a second wave of coronavirus cases, with no new infections since April 4.

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Markets around the world will take this news as a massive relief.

Fears of a second wave of the coronavirus has gripped public sentiment for weeks. But with Hubei facing no new Covid-19 cases for 27 consecutive days, the probability of a second spike following the end of lockdowns now seems increasingly slim.

Markets Will Lose Second Wave Fear

What’s particularly reassuring about this news is that Hubei has been out of lockdown for almost a month. Since April 8, public transport has resumed and people have been able to go outside.

Certain restrictions have remained. But the fact that Hubei has faced no new cases since relaxing its lockdown is perhaps the surest sign yet that a second wave of coronavirus cases isn’t as likely as many have feared.

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Accordingly, this news will come as a significant boost to global markets and investors. For example, a survey published by Bank of America Merril Lynch on April 14 found that 57% of fund managers regarded a second wave as their biggest fear. Many had fled to cash as a result.

Such managers will cheer the news that Hubei is reducing its threat level and has confirmed no new coronavirus cases for 27 days. The U.S. stock market has already been rallying strongly since the lows of March 23, thanks largely to the Fed’s QE. But with U.S. states and various nations now in the process of easing their own lockdowns, a reduced fear of a second wave will strengthen ongoing rallies.

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Coronavirus Isn’t Coming Back

Hubei is the epicenter of the coronavirus pandemic. The central Chinese province is home to Wuhan, the city where the pandemic all began.

In total, Hubei has recorded 67,803 coronavirus cases. However, research from Hong Kong University has suggested that the real figure maybe four times as large as this.

Either way, Hubei’s announcement today indicates that the coronavirus outbreak has all-but ended in the province. And with other nations “past the peak” of their own outbreaks, we could be seeing the beginning of the end for Covid-19.

This article was edited by Samburaj Das.

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