Bloomberg | Feb 27, 2020 09:26
(Bloomberg) -- The sell-off ripping through European equity markets intensified on Thursday as the cases of coronavirus outside China continued to rise.
The region’s benchmark is nearing a correction, with the Stoxx Europe 600 Index now down 8.9% since last week’s record high. The measure slid 2.3% as of 8:12 a.m. in London, with basic resources and travel and leisure industry groups lower, after the U.S. reported its first case of coronavirus that doesn’t have ties to a known outbreak.
Equities are plunging as the spread of the epidemic fuels fears about the impact on global growth and corporate earnings. More coronavirus cases were reported in countries other than China for the first time, the World Health Organization said.
“Given the recent volatility, fear is the dominant factor,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM EK. “In a very short period, we went from all-time high celebrations to panic mode. It’s too early to ‘buy the dip’ in my view and I expect investors to stay on the sidelines or increase cash.”
European equities have now wiped out all the sharp gains made since late October. The Stoxx 600 is on track for its worst week since August 2011. Stocks in Italy, the heart of the outbreak in Europe, fell 2.2% on Thursday. Greek stocks, last year’s big winners, are heading for one of the worst performances among global equity benchmarks this month.
Travel stocks tumbled yet again, down 3.3%. The sector has plunged the most among industry groups since Feb. 19.
Anheuser Busch Inbev NV (NYSE:BUD)joined the chorus of companies warning about the impact of the epidemic, with the world’s largest brewer forecasting the steepest decline in quarterly profit in at least a decade due to the coronavirus. Its shares fell 5%.
“Investors should minimize their exposure to industrial commodities, luxury goods and European airlines,” said Seema Shah, chief strategist at Principal Global Investors. “We also favor quality stocks, especially large companies. “Defensive sectors such as utilities, real estate and health care are likely to do well in the equity markets compared to the broader markets.”
Seven companies including AstraZeneca Plc (NYSE:AZN), Barclays Plc (NYSE:BCS) and HSBC Holdings Plc (LON:HSBA) traded without the right to dividends today, shaving about 0.4 point off the Stoxx 600 and almost 28 points off the FTSE 100 Index.
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors.
More content, faster quotes and charts, and a smoother experience is available only on the App.