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European markets close down as Covid-19 uncertainty continues

Staff at HSBC’s Canary Wharf office in London are sent home due to confirmed case

European markets have endured another torrid day of trading as the Covid-19 virus continues to spread.

According to the WHO more than 90,000 cases have now been confirmed worldwide, with 3,110 deaths.

Italy remains the worst-affected European nation with more than 3,000 cases and 107 deaths. The Italian government has ordered all schools and universities to be closed for 10 days as it tries to cope with the crisis.

The country’s already fragile economy has suffered as a result of the novel coronavirus. The FTSE MIB Index has fallen more than 11.8 per cent in the past month and closed at 21,554.88 at the end of Thursday trading, down 1.78 per cent.

The UK’s Department of Health has confirmed that the number of confirmed cases has jumped to 115 across England, Wales, Scotland and Northern Ireland. Prime minister Boris Johnson urged that it should be “business as usual” for the “overwhelming majority” of Britons.

However for some, such as more than 100 employees at HSBC’s office in London's Canary Wharf, their routines will be disrupted by the virus. HSBC sent the staff of one department home after a worker tested positive for the coronavirus. This is the first confirmed case at a major company in Europe’s main financial hub.

With UK markets initially shocked by the sudden collapse of Flybe airlines at 2am, the FTSE 100 and 250 have suffered in Thursday trading, closing down 1.62 and 2.10 per cent respectively at 6,705.43 and 19,328.69

The IBEX 35 Index in Madrid was the largest loser of Europe’s leading indices, falling 2.58 per cent, while Amsterdam’s AEX Index suffered least, down 0.93 per cent.

The pan-European Euro Stoxx 600 Index closed down 1.34 per cent at 381.11, emphasising the sheer breadth and impact of the Covid-19 virus.

The Federal Reserve’s 0.50 per cent interest rate cut on March 3 has piled pressure on Christine Lagarde. As yet the president of the European Central Bank (ECB) has only gone so far as to urge the need for cooperation and affirmed her readiness to implement “appropriate and targeted measures”.

Nonetheless, as the falling US markets indicate, central banks can only do so much to stem the tide when market confidence takes a tumble.

FURTHER READING: OPEC agrees to largest oil production cut since the global financial crisis

FURTHER READING: Australia’s trade balance falls in January

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