European shares on Friday gave up earlier gains to end firmly in negative territory after the UK and Italy confirmed their first cases of a novel coronavirus, while a set of disappointing eurozone indicators also weighed on sentiment.
Britain’s FTSE 100 on Friday closed down 95.95 points, or 1.3 percent, at 7,286.01, plunging 4 percent from a close of 7,585.98 a week earlier, while the main benchmark in Milan, Italy, bled 2.3 percent as the country’s Cabinet declared a state of emergency over the virus.
The pan-European STOXX 600 on Friday ended down 4.46 points, or 1.1 percent, at 410.70, widening losses to 3.1 percent from 423.64 on Jan. 24, its worst week in almost six months. On the month, it lost 1.2 percent — its worst January since 2016.
“Each new case adds to the uncertainty about the virus,” Cooperatieve Rabobank UA strategist Philip Marey said.
While the illness has been centered on China, governments worldwide have been scrambling to stop its spread, and travel curbs and supply chain disruptions have prompted economists to reassess the potential economic fallout from the outbreak.
Mining companies were the biggest losers, down 1.6 percent, on worries that China and its gigantic market for raw materials will come to a standstill if the epidemic worsens.
Travel and leisure stocks also extended losses as more airlines suspended flights to and from China.
Concerns about the eurozone economy also pushed stocks downward.
Economic growth in the bloc was less than expected in the fourth quarter of last year, mainly due to surprise GDP contractions in France and Italy, while core inflation slowed last month in a worrying sign for the European Central Bank.
The UK’s official exit from the EU later on Friday had no immediate effects on stocks, but it fuels uncertainty going forward.
The FTSE 100 is roughly back to where it was before British Prime Minister Boris Johnson’s landslide election win on Dec. 12 last year, during which he promised to “get Brexit done.”
Among earnings updates, Spanish lender Banco de Sabadell SA tumbled almost 14 percent to the bottom of STOXX 600 after the lender swung to a loss in the fourth quarter.
On the other hand, shares of Signify NV, the world’s largest maker of lights, rallied 7 percent after reporting a higher quarterly core profit, which prompted a price target hike from JPMorgan Chase & Co.
France-based healthcare firm Novacyt shot up 81 percent after saying that it had launched a new molecular test for the coronavirus.
Additional reporting by staff writer
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