European Shares Set For Weaker Open On Pandemic Worries
European stocks look set to open lower on Thursday to extend losses from the previous session as investors asses the economic cost of a viral pandemic that is roiling global financial markets and disrupting the daily lives of people around the world.
The global death toll due to coronavirus is currently 4,292, with 118,326 confirmed cases, according to WHO’s latest situation report.
Asian markets sank, with benchmark indexes in Hong Kong, Japan, South Korea and Australia losing 4-7 percent, as Trump announced a 30-day ban on travel to the United States from Europe over the coronavirus.
It is feared that COVID-19 could drag the global economy into a recession by hitting it from both sides — supply and demand.
Meanwhile, U.S. President Donald Trump’s speech to the nation disappointed as he didn’t keep his promise to detail stimulus plans.
Gold prices rose while oil prices fell around 4 percent to extend losses from the previous session amid the threat of a flood of cheap supply.
In economic releases, U.K. house price inflation gathered momentum in February as prices increased across all parts of the country, residential survey data from the Royal Institution of Chartered Surveyors showed.
The house price balance rose sharply to 29 percent in February from 18 percent in January. This was also above economists’ forecast of 20 percent.
Industrial production data from euro area is due later in the session, headlining a light day for the European economic news.
U.S. stocks plunged again overnight as Boeing announced a number of MAX order cancellations, Goldman Sachs predicted the end of a long bull market and the World Health Organization officially declared the coronavirus outbreak a global pandemic.
The Dow Jones Industrial Average plummeted 5.9 percent and the S&P 500 gave up 4.9 percent to end at their worst closing levels in over a year. The tech-heavy Nasdaq Composite lost 4.7 percent.
European markets reversed course to end lower on Wednesday as coronavirus cases in Italy surpassed 10,000 and German Chancellor Angela Merkel warned that up to 70 percent of the German population will likely contract the deadly virus.
The pan-European Stoxx Europe 600 index declined 0.7 percent. The German DAX slid 0.4 percent and France’s CAC 40 index shed 0.6 percent.
The U.K.’s FTSE 100 tumbled 1.4 percent despite the Bank of England cutting interest rates and new U.K. Finance Minister Rishi Sunak announcing fiscal stimulus measures.
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