By Barbara Kollmeyer, MarketWatch
AFP via Getty Images
European equities tumbled again Friday, as investor panic over fallout from the coronavirus crisis continued unabated and investors flocked toward perceived safer assets such as government bonds.
The pan-European Stoxx 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.29% index slid 4% to 365.34, after sliding 1.4% on Thursday. The index is set to lose over 2.9% for the week. The German Dax 30 /zigman2/quotes/210597999/delayed DX:DAX +0.66% fell 3.3%, the French CAC /zigman2/quotes/210597958/delayed FR:PX1 +0.09% lost 3.6% and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.09% fell 3.8%.
Those losses came as Wall Street was hammered anew over virus worries, with the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.17% dropping over 600 points, as investors looked past strong February jobs data to a potential threat to hiring from the coronavirus.
The Japanese yen climbed 0.9% against the U.S. dollar, while a sharp move into bonds overnight sent the yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y 0.00% to a record low of 0.69%. German bund yields dropped to six-month low on Friday, of 0.726%.
“As the bond market prices the Fed toward ZIRP [zero interest-rate policy], this makes us anxious near term on risk appetite,” said a team of strategists led by Jeremy Hale at Citigroup. Zero interest-rate policy involves central banks trying to stimulate growth by keeping rates close to nil.
The number of those affected by the virus world-wide reaching 100,000 on Friday, with cases falling in Asia but climbing in Europe and the U.S., where more than 230 cases have been reported.
“With no signs of the outbreak slowing down — the U.K., for example, saw its first COVID-19 death on Thursday — investors remain gripped with a near unshakable panic, the week’s various central bank rate cuts only serving to reinforce the seriousness of the situation,” said Connor Campbell, financial analyst with Spreadex, in a note to clients.
Crude-oil futures /zigman2/quotes/209723049/delayed CL00 +0.92% fell 7% after news reports said Russia, a key OPEC ally, resisted the cartel’s plea for extra production cuts through the end of this year. OPEC ministers on Thursday agreed on a call that would see the cartel cut production by a further 1 million barrels a day, while OPEC allies, led by Russia, would reduce output by an additional 500,000 barrels.
Tesco /zigman2/quotes/203761082/delayed UK:TSCO +0.49% was up 1.3% after the U.K. grocer announced it is launching a price-matching campaign against rival Aldi. “This is an aggressive move that shows confidence, at a time when Aldi’s sales momentum has come progressively under pressure and margins are at an all-time low of 1.75%,” said Jefferies analyst James Grzinic.
Shares of Italy’s Prysmian /zigman2/quotes/209387844/delayed IT:PRY +1.05% slid over 10% after the multinational corporation produced more cautious guidance for 2020 and net profit disappointed.
Capita /zigman2/quotes/204738740/delayed UK:CPI +1.31% shares tumbled nearly 20% on the heels of a 38% slump on Wednesday after disappointing results for the business process outsourcing company.
Travel-related shares were being hit again, with tourism group TUI /zigman2/quotes/207049334/delayed UK:TUI +2.06% sliding over 3% and shares of cut-rate airline Ryanair Holdings /zigman2/quotes/205429530/delayed IE:RY4C -0.43% down 1.8%.
In the U.K., British Airways said two staff members had tested positive for the virus. Shares of International Consolidated Airlines Group /zigman2/quotes/208070069/delayed UK:IAG -0.24% , which operates the airline, fell 5% in London. But Air France KLM /zigman2/quotes/205396176/delayed FR:AF -0.34% managed to buck the weaker trend with a 3% gain.