European stocks fall sharply amid China virus fears
Bourses across Europe were down sharply as the economic impact of the coronavirus intensified
The impact of coronavirus was seen across European markets as stocks dropped sharply on Monday as the economic fallout from the Chinese virus outbreak intensified.
Chinese officials have now confirmed more than 2,700 cases of the new strain of coronavirus, which originated in the city of Wuhan, with the death toll rising to 80 and 461 people in critical condition.
The virus has now spread globally, with cases being detected in a number countries in Asia, the U.S., France, Australia and Canada confirming its presence.
The pan-European Stoxx 600 ended the session 2.3% lower, with the China-exposed basic resources sector plunging 4.3% to lead losses as all sectors and major bourses traded firmly in negative territory.
This has surged the demand for traditional safe-haven assets such as gold and the Japanese yen as investors seek hedge against the potential economic impact of the virus.
Stocks on Wall Street tumbled on Monday, with the Nasdaq dropping by almost 2%.
In Europe, equities were further impacted by a fall in German business sentiment in January, according to the latest Ifo Institute survey, falling from 96.3 in December to 95.9 and missing the Reuters consensus forecast of 97.0.
The Ifo Institute also projected that Europe’s largest economy will likely grow by 0.2% in the first three months of 2020 as demand in the ailing industrial sector slowly returns.
In corporate news, the Swiss Financial Market Supervisory Authority (FINMA) is looking into the role of the Credit Suisse board in the lender’s recent spying scandal, Reuters reported on Monday, citing sources.
Travel stocks took a significant hit from coronavirus fears in early trade, with Air France KLM shares falling 5.6%, while British Airways parent International Consolidated Airlines Group slid 5.4% and London-listed Easyjet shed 5%.
Shares of CNH Industrial fell 7% to end Monday’s session at the bottom of the European benchmark.
In the Stoxx 600, Wienerberger’s was among a few gainers, with shares rising by a modest 1.5% to top the index.
NMC Health’s London-listed shares climbed almost 1% after The Capital Group Companies increased its stake in the Abu Dhabi-based hospital chain.