European Stocks Extend Losses On Virus Pandemic Scare

European stocks extend losses on virus pandemic scare

London, (UrduPoint / Pakistan Point News - 25th Feb, 2020 ) :European stock markets fell further Tuesday, although steeper declines in late trading did not match a major sell-off triggered by new coronavirus developments a day earlier.

Global equities have been hit by growing concern that the COVID-19 outbreak could derail the global economy.

More deaths and a surge in cases in Iran, Italy, Japan and South Korea has raised the risk of a pandemic.

After rebounding early on Tuesday, major European markets took fright and headed lower once again, with losses increasing as the day wore on to almost two percent by the close.

A Paris investment manager said that the latest sell-off appeared to be broader based than an initial phase of selling that had focused on auto, leisure and luxury stocks.

Portfolio manager Frederic Rozier at Mirabaud France commented that the late acceleration in European declines was "fairly even," and added: "We have the feeling it was the market (as a whole) that was being sold," with the exception of some domestic stocks.

"In the first downward phase that we saw, fairly specific issues such as autos, leisure and luxury" were being dumped the most, he explained.

On Tuesday, Tokyo's main stocks index closed with a 3.3-percent loss as traders caught up with global counterparts after a Japanese public holiday on Monday.

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

The Dow Jones index was off by one percent in midday New York exchanges.

- 'Positive mood not short-lived' - CMC Markets UK analyst David Madden remarked Tuesday that "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 said.

Italy has reported a big jump in cases -- from six to 283 since Friday -- and now has by far the highest number of confirmed infections in Europe.

News at the weekend that COVID-19 was spreading and claiming lives far beyond China has focused investor's minds on the potential for longer-term disruption to supply networks and consumption.

The World Health Organization says the epidemic has peaked 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.

The world is "simply not ready" to rein in the outbreak, the head of a joint WHO-China mission of experts said Tuesday.

"You have to be ready to manage this at a larger scale... and it has to be done fast," Bruce Aylward told reporters in Geneva.

IG analyst Joshua Mahony noted that "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".

Among safe-haven investments favoured by investors, the price of gold eased lower after hitting a seven-year high on Monday.

The yield on 10-year US Treasuries declined to 1.33 percent, their lowest level in more than three years.

Oil prices, which tanked by around 3.8 percent on Monday, slumped again as traders mulled whether the global economy would need much crude in the days and weeks to come.

- Key figures around 1700 GMT - London - FTSE 100: DOWN 1.9 percent at 7,017.88 points (close) Frankfurt - DAX 30: DOWN 1.9 percent at 12,790.49 (close) Paris - CAC 40: DOWN 1.9 percent at 5,679.68 (close) Milan - FTSE Mib: DOWN 1.4 percent at 23,090.44 (close) Madrid - IBEX 35: DOWN 2.5 percent at 9,250.80 (close) EURO STOXX 50: DOWN 2.1 percent at 3,572.51 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 1.0 percent at 27,681.74 Euro/dollar: UP at $1.0872 from $1.0854 Pound/dollar: UP at $1.30 from $1.2924 Euro/pound: DOWN at 83.62 pence from 83.98 pence Dollar/yen: DOWN at 110.15 from 110.72 Gold: DOWN at $1,647.20 per ounce from $1,659.38 late on MondayBrent Crude: DOWN 1.5 percent at $54.91 per barrelWest Texas Intermediate: DOWN 1.6 percent at $50.62

Your Thoughts and Comments