United Kingdom stocks fall further as coronavirus triggers new sell-off

Cornelia Mascio
Febbraio 27, 2020

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Travel stocks and airlines were again among those taking the brunt of the sell-off in London, with holiday firm Tui and low-priced carrier easyJet suffering a third day in a row of hefty share falls - down 4% and 3% respectively.

On Tuesday, Tokyo's main stocks index closed with a 3.3-percent loss as traders caught up with global counterparts after a Japanese public holiday on Monday. Italy has seen a rapid increase in infections.

Airline stocks, which took the biggest hit on Monday, also fell further.

Among safe-haven investments favoured by investors, the price of gold eased lower after hitting a seven-year high on Monday.

"The number of new cases in China ex-Hubei are now at very low levels, which should allow economic activity to normalize and supply chain disruption to begin to resolve itself, in line with our base case".

About 77,000 people in China, where the virus emerged past year, have been infected and almost 2,600 have died. "They may now be reappraising the situation".

European shares recorded their worst one-day loss since June 2016 on Monday as worries about the spread of the new virus far beyond China whacked global markets and risk sentiment.

Travel firms also continued to suffer.

An earlier pause for breath on European indices proved short-lived, with London's FTSE 100 Index soon joining its counterparts on the continent in diving lower once more.

"Besides a tapering in the geographical spread of the coronavirus or unexpected improvements in key short-term macro indicators, the circuit breaker for these market moves is starting to move towards the USA central bank", Danske Bank said in a note to clients.

Only about three out of 10 small and medium-sized enterprises (SMEs) were back to work, while transport problems were preventing workers from travelling and disrupting shipments of raw materials, said industry ministry spokesman Tian Yulong.

SMEs make up about 60 percent of the Chinese economy.

Oil prices fell by more than 4 percent on Monday, as investors anxious about a fall in demand following the temporary factory closures due to the virus.

The price of Brent crude dropped by more than $US2 to $US56.18 a barrel.

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