European stock markets, very nervous for a few days because of renewed concerns related to the expansion of the coronavirus, reacted very negatively on Tuesday as the WHO now fears having to manage a pandemic. After opening up slightly, investors began to " consider the possibility that the Covid-19 becomes a pandemic " and unscrewed, in the wake of the Asian stock markets, confirms Craig Erlam, analyst at Oanda. " It is the duration of the coronavirus and the consequences of the slowdown in the supply chain " that weigh on the markets, added Frédéric Rozier, portfolio manager at Mirabaud France.
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The Covid-19 epidemic now concerns, apart from China, more than thirty states where it has made more than 40 dead and 2,500 cases of contamination, raising WHO's fear of a " pandemic ", namely an epidemic of international scope. Which threatens a little more to disrupt business and penalize global growth. Due to the health crisis, the Banque de France even said it was ready to “ slightly ” reduce its French growth forecast for 2020.
In Russia, the RTS index of the Moscow Stock Exchange, closed on Monday due to a public holiday, fell 5.16%. The Eurostoxx lost 2.07% to 3572.51 points. Wall Street also opened in retreat: the Dow Jones Industrial Average lost 0.91% around 5:10 p.m. GMT while the Nasdaq index, with strong technological coloration, fell by 0.93% and the widened S&P 500 index by 1.03 %.
Italy in the eye of the storm
The European country most affected by the virus with seven deaths, Italy was previously affected mainly in the north, and particularly in Lombardy, but new cases were detected on Tuesday in Sicily, Tuscany and Liguria. In Milan, the biggest drop was recorded by Banco BPM (-4.05%), due to investor concerns related to the increase in the spread (the difference between the ten-year borrowing rates with the rate German reference).
The pharmaceutical company Diasorin, whose products are used to treat viral diseases in particular, also fell (-3.89% to 106.3 euros) like most European companies in the sector (-4.94% for Novartis to 86 , CHF 78 or -1.23% to 90.44 euros for Sanofi).
Banks and transport suffer
In this panorama, the big European banks seemed to massively take the hit, from Barclays (-2.45%) to Deutsche Bank (-2.02%) via BNP Paribas (-4.88%). In Paris, the values of the sector occupy massively the tail of the CAC 40.
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The values linked to travel and tourism were particularly affected by the risks. EasyJet lost 3.50% and cruise ship Carnival 5.92%. In Germany, Lufthansa (-1.55% to 13.30 euros) also declined after the words of an executive indicating that the company was studying the possibility of freezing certain hirings, consolidating the search for savings of the company in progress for several years.