Egypt Independent

European stocks extend losses on fear of virus pandemic



European stock markets fell further on Tuesday but declines in midday trading were far less than during a major sell-off a day earlier.

World equities suffered dizzying declines Monday, sparked by fears that the COVID-19 outbreak could derail the global economy.

More deaths and a surge in new coronavirus cases in Iran, Italy, Japan and South Korea has fanned fears of a pandemic.

Tokyo’s main stocks index closed Tuesday with a hefty 3.3-percent loss as traders caught up with global markets after a Japanese public holiday Monday.

Other Asian equity markets recovered a bit meanwhile, with increases in Hong Kong and Seoul.

After rebounding early on Tuesday, major European markets then headed lower once again, although with much less momentum compared with their losses of between 3.0 and 4.0 percent the day before.

– ‘Positive mood not short-lived’ –

“Equity markets in Europe enjoyed a rebound in early trading in the wake of yesterday’s bloodbath of a session, but the positive move was short-lived,” said CMC Markets UK analyst David Madden.

“The brutal losses endured yesterday coaxed a few buyers out of the woodwork, but given that equity benchmarks are back in the red suggests that sentiment is still sour.

“The coronavirus crisis in Italy remains at the forefront of traders’ minds,” Madden added.

Italy has seen a serious jump in cases — from six to 229 since Friday — and now has the biggest number of confirmed infections in Europe.

News at the weekend that COVID-19 was now spreading and claiming lives far beyond China sparked Monday’s market rout, with Wall Street’s Dow index suffering its worst day in two years.

The rapid spread abroad came as the World Health Organization said the epidemic had peaked at its epicenter in China, where it has killed more than 2,600 people and infected more than 77,000 others.

But the situation has worsened elsewhere with nearly 2,700 other cases and more than 40 deaths globally, prompting restrictions on travellers from infected nations, the cancellation of football matches and national efforts to isolate suspected carriers.

“What was largely a Chinese issue to resolve has soon become an international problem, with European eyes transfixed on Italian efforts to curb the spread of the virus,” IG analyst Joshua Mahony said.

“Fears over a potential coronavirus contagion throughout Europe is likely to provide substantial risk-off sentiment for days and weeks to come, with significant pressure on the Italians to stop this outbreak from spreading throughout the continent.”

Italian Prime Minister Giuseppe Conte blamed the management of a hospital in northern Italy for an outbreak there.

Elsewhere Tuesday, haven investment gold slid after hitting a seven-year high on Monday.

Oil prices, which tanked by around 3.8 percent on Monday, remained in negative territory owing to concerns that the global economy would require less crude in the days and weeks to come.

– Key figures around 1215 GMT –

London – FTSE 100: DOWN 0.7 percent at 7,103.80 points

Frankfurt – DAX 30: DOWN 0.5 percent at 12,974.07

Paris – CAC 40: DOWN 0.6 percent at 5,756.01

Milan – FTSE Mib: DOWN 0.6 percent at 23,293.34

Madrid – IBEX 35: DOWN 1.1 percent at 9,379.00

EURO STOXX 50: DOWN 0.7 percent at 3,621.61

Tokyo – Nikkei 225: DOWN 3.3 percent at 22,605.41 (close)

Hong Kong – Hang Seng: UP 0.3 percent at 26,893.23 (close)

Shanghai – Composite: DOWN 0.6 percent at 3013.05 (close)

New York – Dow: DOWN 3.6 percent at 27,960.80 (close)

Euro/dollar: DOWN at $1.0834 from $1.0854

Pound/dollar: UP at $1.2965 from $1.2924

Euro/pound: DOWN at 83.54 pence from 83.98 pence

Dollar/yen: DOWN at 110.53 from 110.72

Gold: DOWN at $1,655.59 per ounce from $1,659.38 late on Monday

Brent Crude: DOWN 0.3 percent at $55.60 per barrel

West Texas Intermediate: DOWN 0.1 percent at $51.33

burs-rfj/bcp/wai

Image: AFP / Jung Yeon-je While the World Health Organization said the outbreak had ‘peaked’ in China, it warned about a possible pandemic