By Steve Goldstein, MarketWatch
European stocks ended sharply lower in volatile trading on Tuesday as markets failed to set a floor after the pounding they took over the spread of the coronavirus in Italy and South Korea.
A day after a 5.4% drop that was the worst single-day percentage fall in more than three years, Italy’s FTSE MIB /zigman2/quotes/210598024/delayed IT:I945 +2.88% fell 1.3% to 23131.17. Banco BPM /zigman2/quotes/204236087/delayed IT:BAMI +5.01% and biotech DiaSorin /zigman2/quotes/204234418/delayed IT:DIA +0.18% lost nearly 5% each.
The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +1.97% , which ended Monday at its third-lowest level of the year, dropped 1.8% to 404.60.
For the Stoxx 600, it’s the largest four-day percentage decline since June 28, 2016.
Decliners included Commerzbank /zigman2/quotes/200193353/delayed DE:CBK +4.64% , which fell nearly 7%, and cruise operator Carnival /zigman2/quotes/210414141/delayed UK:CCL +0.49% , which fell over 6%.
U.S. stocks traded lower on Tuesday, extending losses after the 1,000-point wipeout in the Dow industrials /zigman2/quotes/210598065/realtime DJIA +0.36% on Monday.
The yield on the benchmark 10-year German bund /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y -9.30% fell 4 basis points to -0.52%.
The spread of the coronavirus in Italy is particularly worrying since the country has not identified the so-called patient zero who spread it.
South Korea now has 977 confirmed cases to Italy’s 232, according to the Covid-19 tracker from Johns Hopkins. Mainland China has 80,242 confirmed cases.
“Given the incubation period of the virus, the next two weeks will be critical in determining the extent of the outbreak, the steps authorities are willing and able to take to contain it, and the economic effect of those measures,” said Mark Haefele, global chief investment officer of wealth management at UBS, which prefers emerging market equities over eurozone stocks.
One of the few gainers was chemicals group Arkema /zigman2/quotes/200304947/delayed FR:AKE +1.97% , which surged in Paris as Bloomberg News reported that it’s considering asset disposals in response to activist investor Elliott Management taking a stake.