Markets watch out for avian flu indicator

With conflicting stories emerging from the Far East about the spread of avian flu H5N1, the world's financial markets are keeping an eye on the World Health Organization's pandemic alert level, to decide if and when to factor in the enormous projected costs of a pandemic.

The WHO's current phase of pandemic alert is at level 3 (out of 6), which is defined as "No or very limited human-to-human transmission." The next level up "evidence of increased human-to-human transmission" could rapidly move into a more serious level, which is why some economists fear panic selling if the WHO upgrades its alert to level 4. Speaking to the Daily Telegraph recently, Rob Carnell, an ING bank economist forecast: "equities are going to get a kicking if there is a pandemic. Economic activity will plunge because of the way people change their behaviour. It'll be driven by fear."

The WHO's up-to-date avian flu alert can be found at http://www.who.int/csr/disease/avian_influenza/phase/en/index.html.