European stock markets fell sharply on Monday, with investors worried as coronavirus cases increased outside China – in South Korea, Iran and Italy – over the weekend.
The FTSE MIB Italy index
fell 5.8% – its worst percentage decline since August 24, 2015 – after cases of coronavirus swept across northern Lombardy over the weekend, which includes the financial capital, Milan. Authorities have locked out ten cities, the number of confirmed cases having risen from three on Friday to more than 150 on Monday, with three deaths. Venice reported its first two cases of coronavirus and closed its annual carnival two days earlier.
IShares MSCI Italy ETF listed in the United States
United States: EWI
The losses were not limited to Italy. The Stoxx Europe 600 index
dropped 4% and the national indices of Germany
United Kingdom: UKX
all fell sharply, as did US stocks
United States: SPX
Hammered airline stocks
There were virtually no stocks in the green on Monday. Airlines stocks posted the largest declines on Monday, with easyJet PLC stocks
15% decrease and Ryanair Holdings PLC
down almost 14%. Air France-KLM SA
a group of events, fell 10%.
The industrial sector was also hammered by the Anglo American miner
United Kingdom: AAL
, manufacturer of CNH Industrial tractors
and steelmaker ArcelorMittal
fall. South Korea reported 161 new cases on Monday, bringing the country’s total to 763, and two other deaths bringing the total to seven.
An Iranian lawmaker has reported 50 deaths in Qom, although the country’s health ministry said only 12 died across the country.
“While new outbreaks are likely to continue around the world and Iraq and Turkey close their borders with Iran after cases are reported there, financial markets may well have to get used to a long period of ‘Uncertainty because consumer behavior around the world is starting to change,’ said Michael Hewson, chief market analyst at CMC Markets UK, in a note to customers.
“There is already evidence that this is happening, with the number of Chinese tourists declining worldwide, while the French Minister of Finance said that the number of tourists to France had already dropped by more than 30% during the G20 finance ministers meeting this weekend, “he said.
On Saturday, the International Monetary Fund warned that the virus epidemic could reduce global economic growth by 0.1% this year and cause China’s annual growth to be 0.4 percentage points lower than January estimates.
A tweet from a local supermarket showed empty shelves of Nutella.
Italian soccer club Juventus
was the worst performing FTSE MIB component after canceling 3 Serie A games due to the spread of coronavirus. Fund manager Azimut Holding
and luxury goods company Salvatore Ferragamo
also treated for heavy casualties.
The assets that are doing well in the crises advanced on Monday. Futures on gold
United States: GC00
jumped by $ 19 an ounce, and the 10-year Treasury yield
lost 9 basis points.
against the euro at the highest level in almost five years.