Europe shares bear the most daily loss ever

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(Reuters) – European stocks tumbled 11.5 percent on Thursday, in their worst daily loss ever, amid a cold reception for steps by governments and central banks to tackle the potential economic consequences of the rapidly spreading Corona virus.

Dealing on the Frankfurt Stock Exchange on Thursday. Photography: Ralph Orlovsky-Reuters.

Airline stocks received some of the heaviest strikes over the course of Thursday after the United States restricted travel to Europe, while bank shares were affected by growing signs of corporate hardship.

Bank stocks retreated to record lows, as the ECB’s reluctance to cut interest rates did not help them.

The Coruna virus, which the WHO described as a pandemic, has hit high-risk assets worldwide, erasing more than $ 15 trillion of its value in less than a month.

The benchmark STOXX 600 index has been on the decline since the virus began its outbreak, taking its biggest daily losses and pushing further into the betting range. A sudden fall in oil prices early this week also sparked heavy selling.

The index has so far lost nearly a third of its value since mid-February. “At the moment, we have to think and acknowledge that we will continue to be in this volatile market environment,” said Philip Bruger, director of investment strategy at Union Investment.

“We believe that the focus should really be on providing liquidity in the financial system, and on solvency.”

Shares in Italy, the European country most affected by the virus, closed around 17 percent, at its worst session ever. The Italian government announced a nationwide shutdown.

Bank stocks had the most negative impact on the Italian index. The Spanish index, which is rich in banking stocks, fell 14 percent.

Auto and insurance stocks were the worst performers in the region on Thursday, losing more than 15 percent.

The travel and entertainment index closed 13.2 percent lower, with Air France KLM, Lufthansa and IAG, owner of British Airways, tumbling in the wake of travel restrictions.

Lufthansa shares fell 14 percent at the close, hitting its lowest level in nearly eight years after the epidemic forced it to stop selling the global operations of its catering company, LSG.

Prepared by Ahmed Elhamy for the Arabic Bulletin





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