(Reuters) – European stocks halted a three-day winning streak Thursday as concerns over the extent of economic damage from the coronavirus epidemic outweighed optimism about supporting monetary stimulus.
Resources .SXPP was the underperforming sector, as several heavyweight miners, including BHP Group (BHPB.L) and Rio Tinto (RIO.L), negotiated ex-dividend. The two stocks lost about 6% and 7% for the day, respectively.
The main European equity benchmark ended down 1.4% after the number of deaths from the epidemic reached over 3,300, as several other companies issued profit warnings due to disruption caused by the coronavirus.
Hopes of several major central banks to revive the impact of the epidemic had stabilized the index this week, but questions remained as to whether central banks would be able to fully house the major economies.
Analysts firmly expect the European Central Bank to cut interest rates by 10 basis points next week.
“At 10 basis points, lower interest rates do little to the economy. It is more a signal to the market that the ECB is ready to act and also, it will probably be accompanied by a message indicating that they are considering more targeted measures, “said Elwin de Groot, responsible for macro strategy at Rabobank in Amsterdam. .
Travel and leisure stocks .SXTP fell 2.9%, the sector being among the most affected by the virus.
Airline inventories fell after the collapse of British regional airline Flybe, making the struggling carrier the industry’s first major victim of the epidemic.
British commercial broadcaster ITV (ITV.L) fell 12% after warning that advertising revenue for April could drop by about 10% as travel agencies postponed their campaigns.
The German car manufacturer Continental (CONG.DE) fell 12.4% after posting a net loss of 1.2 billion euros ($ 1.34 billion) in 2019, the index of car manufacturers wider .SXAP losing 3.4% in tow .
HSBC Heavy Bank (HSBA.L) fell 1.2% after sending over 100 workers to London after a worker tested positive for coronavirus.
Wider .SX7P bank stocks fell as bond yields declined steadily
The rating agency Fitch said Thursday that the spread of the coronavirus in the EU opens new channels for it to affect the regional economy and accentuate its negative impact on GDP growth.
Elob of Rabobank said the EU will likely experience two quarters of zero to negative growth, with some countries posting negative growth in 2020.
The German food delivery company Hellofresh was among the stocks in the dark (HFGG.DE), who was one of the main winners of the STOXX 600 after JP Morgan improved the title.
Sruthi Shankar’s reports to Bengaluru; edited by Patrick Graham, Bernard Orr and Timothy Heritage