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Europe close: Stocks hit by late selling following report of new virus cases in Beijing

By Alexander Bueso

Date: Friday 21 Feb 2020

Europe close: Stocks hit by late selling following report of new virus cases in Beijing

(Sharecast News) - Stocks on both sides of the Atlantic slumped in the last half hour of trading in Europe following a report in the Chinese press of 36 coronavirus infections among healthcare workers at a Beijing hospital, which triggered concern of a possible outbreak in the country's capital.
That followed news of a similar and as of yet unexplained occurrence in South Korea and another report, this time from Al-Jazeera, regarding the possible undercounting of cases in North Korea.

After a lower start, stocks had nearly managed to reclaim all their losses before being blindsided by a wave of selling that reportedly left many observers scratching their heads as they searched for an explanation.

The news out of Asia came as analysts continued to try and gauge the impact on economic growth, with S&P Global Ratings having warned that under a worst case scenario, the questionable loan ratio of Chinese banks could double.

For their part, analysts at Capital Economics projected a near 2.0% quarterly annualised drop in emerging markets GDP in the first quarter of 2020.

By the end of trading, the benchmark Stoxx 600 was down by 0.86% at 430.19, alongside a 0.91% dip on the German Dax to 13,664.0, while the FTSE Mibtel gave back 1.56% to 25,080.16.

Euro/dollar meanwhile was drifting lower by 0.14% to 1.07947 although front month Brent crude oil futures were still up, rising by 0.32% to $59.51 a barrel on the ICE.

On a much more positive note, overnight the World Health Organisation reported a 1.5% drop in the number of new virus cases in China on Thursday to reach 1,872.

In company news, shares of A.P. Moller-Maersk A/S fell after the world's largest shipping company said that it will be impacted in 2020 by "considerable uncertainties" due to the outbreak's toll on global trade.

Swiss Re was the top faller on the Stoxx 600, with shares of CNP Assurances close behind.

Elekta AB was another top faller after the radiation medicine specialist posted a 6% drop in gross order intake to SEK 4,276m in its third quarter as its US business failed to live up to expectations.

Air France was 3% lower after announcing that the fallout from the virus would result in a €150-200.0m hit through April.

In Spain, Telefonica was walloped as management unveiled a 0.6% dip in full-year reported sales to €48.442bn, although free cash flow jumped by 20.6% to €5.912m, to hit its highest mark since 2013.

French insurer Axa was also under the cosh after reporting lower-than-expected profits on the back of restructuring costs.


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