European stocks closed sharply lower in volatile trading on Tuesday, as the markets failed to set a floor after the pounding, they resumed the spread of the coronavirus in Italy and South Korea.
One day after a 5.4% drop, the worst percentage drop in a day in more than three years, the Italian FTSE MIB
I945,
fell 1.3% to 23,131.17. Banco BPM
BAMI,
and biotechnology DiaSorin
DIA,
lost almost 5% each.
The Stoxx Europe 600
SXXP,
which ended Monday at its third lowest level of the year, lost 1.8% to 404.60.
For the Stoxx 600, this is the largest drop in percentage over four days since June 28, 2016.
Decliners included Commerzbank
CBK,
, which fell by almost 7%, and cruise ship Carnival
CCL,
, which fell by more than 6%.
US stocks traded lower on Tuesday, prolonging losses after the disappearance of 1000 points in the Dow industries
DJIA,
Monday.
10-year benchmark German Bund yield
TMBMKDE-10Y,
fell 4 basis points to -0.52%.
The spread of the coronavirus in Italy is of particular concern because the country has not identified the so-called zero patient who spread it.
South Korea now has 977 confirmed cases against 232 for Italy, according to the tracker Covid-19 by Johns Hopkins. Mainland China has 80,242 confirmed cases.
“Given the incubation period of the virus, the next two weeks will be crucial in determining the extent of the epidemic, the measures that authorities are willing and able to take to contain it, and the economic effect of these measures, “said Mark Haefele, global investment manager for wealth management at UBS, which prefers emerging market stocks over eurozone stocks.
One of the rare winners was the chemical group Arkema
AKE,
, which jumped in Paris as Bloomberg News announced that it was considering selling assets in response to the equity stake in activist investor Elliott Management.
