European stock markets tumbled sharply on Monday, with investors gripped by worry as coronavirus cases surged outside of China — in South Korea, Iran and Italy — over the weekend.
The FTSE MIB Italy index /zigman2/quotes/210598024/delayed IT:I945 +2.84% nosedived 5.8% — its worst percentage decline since Aug. 24, 2015 — after coronavirus cases swept through the northern Lombardy region over the weekend, which includes the financial capital, Milan. Officials put nearly a dozen towns on lockdown as the number of confirmed cases went from three on Friday to more than 150 by Monday, with three deaths. Venice reported its first two coronavirus cases, and shut its annual Carnival two days early.
The U.S.-listed iShares MSCI Italy ETF /zigman2/quotes/207981587/composite EWI +1.02% fell 5.7%.
The losses weren’t limited to Italy. The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.68% fell 4% and the national indexes of Germany /zigman2/quotes/210597999/delayed DX:DAX +2.04% , the U.K. /zigman2/quotes/210598409/delayed UK:UKX +1.71% and France /zigman2/quotes/210597958/delayed FR:PX1 +2.41% all fell sharply, as did U.S. stocks /zigman2/quotes/210599714/realtime SPX -0.80%
Airline stocks hammered
There were virtually no stocks in the green on Monday. Airline stocks were showing the biggest declines on Monday, with shares of easyJet PLC /zigman2/quotes/202825892/delayed UK:EZJ +6.95% dropping 15% and Ryanair Holdings PLC /zigman2/quotes/205429530/delayed IE:RY4C +6.20% down nearly 14%. Air France-KLM SA /zigman2/quotes/205396176/delayed FR:AF +2.24% fell 10%.
CTS Eventim /zigman2/quotes/201877529/delayed DE:EVD +4.32% , an events group, fell 10%.
The industrial sector also got hammered, with miner Anglo American /zigman2/quotes/201381512/delayed UK:AAL +1.08% , tractor maker CNH Industrial /zigman2/quotes/202893526/delayed IT:CNHI +4.78% and steelmaker ArcelorMittal /zigman2/quotes/209487033/delayed NL:MT +4.16% falling. South Korea reported 161 new cases on Monday, bringing the country’s total to 763 cases, and two more deaths raising that toll to seven.
A lawmaker in Iran reported 50 deaths in Qom, though the country’s health ministry said only 12 have died in the whole country.
“With further outbreaks likely to continue across the world, and Iraq and Turkey closing their borders to Iran after cases being reported there, financial markets could well have to get used to an extended period of uncertainty, as consumer behavior globally starts to change,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note to clients.
“There is already evidence that this is happening, with Chinese tourist numbers down across the world, while the French finance minister said that tourist numbers in France were already down over 30% at this weekend’s G20 finance ministers meeting,” he said.
On Saturday, the International Monetary Fund warned the virus outbreak could reduce global economic growth by 0.1% this year, and drag China’s annual growth 0.4 percentage points lower than January estimates.
No more Nutella
A tweet from a local supermarket showed empty shelves of Nutella.
Italian soccer club Juventus /zigman2/quotes/200971889/delayed IT:JUVE +2.50% was the worst performing FTSE MIB component after 3 Serie A matches were cancelled due to the spreading coronavirus. Fund manager Azimut Holding /zigman2/quotes/200914187/delayed IT:AZM +2.68% and luxury products firm Salvatore Ferragamo /zigman2/quotes/204256900/delayed IT:SFER +7.70% also nursed heavy losses.
Assets that do well in crises advanced on Monday. Gold futures /zigman2/quotes/210034565/delayed GC00 -0.81% surged some $19 an ounce, and the yield on the 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -1.54% fell 9basis points.
The Swiss franc /zigman2/quotes/210561034/realtime/sampled CHFEUR -0.0557% rose against the euro to the highest level in nearly five years.