European stocks sink further as pandemic fears hit buying

Iseq closes lower with banks down over 4%, while Dalata up 3.5% after strong results

The Nikkei 225 Index on the Tokyo Stock Exchange. Photograph: Philip Fong/AFP via Getty

The Nikkei 225 Index on the Tokyo Stock Exchange. Photograph: Philip Fong/AFP via Getty

 

European shares ended at their lowest in nearly two months on Tuesday as concerns over a coronavirus pandemic roiled markets, which had already marked enormous losses in the previous session.

Banking and insurance shares led declines, as a rush for safety saw a drop in bond yields.

Dublin

Dublin followed other markets lower on rising concerns over Covid-19 with AIB and Bank of Ireland shares particularly weak, with both down more than 4 per cent.

Hotel group Dalata, which announced a 9.3 per cent rise in full-year revenues to €429.2 million on Tuesday, was among the few gainers, up 3.5 per cent.

Iseq-heavyweight CRH declined 1.4 per cent, while Kingspan, which closed at a record high last week, lost 1.3 per cent.

London

London-listed stocks fell sharply to fresh five-month lows on Tuesday as an increase in coronavirus cases outside China triggered a second day of selling across global markets.

The blue-chip Ftse 100 lost 1.9 per cent, a day after logging its worst session since 2015, with reports of the virus spreading farther, notably in Europe and Iran.

Among the few stocks making it to the black on the Ftse 100 was insurer Prudential, which ended the day flat after hedge fund Third Point amassed a stake of over $2 billion and called on the company to split in two.

Credit investor Pollen Street Secured Lending soared 6.7 per cent to its highest since July 2017 after saying it was in talks with Waterfall Asset Management about a sale. British engineer Meggit fell 5.1 per cent after warning of the effect from the suspended production of Boeing’s 737 Max aircraft and disruptions from the coronavirus outbreak.

Building materials supplier SIG slid 18 per cent to the bottom of the mid-cap index after saying it was replacing chief executive Meinie Oldersma as it seeks to stem a slide in its business caused by a weak European construction market.

Europe

The pan-European Stoxx 600 index ended 1.8 per cent lower as the virus’s spread to shores beyond China made investors swiftly reassess its potential economic impact. The Stoxx has seen nearly $700 billion wiped off its value since Friday’s close.

Germany’s Commerzbank was the worst performer on the bank index, closing about 5.8 per cent lower, while insurers were bottomed out by Legal & General Group.

Among individual movers, German car parts maker Leoni slumped 6 per cent after reporting lower-than-expected core profits, while UK engineering firm Meggitt slid 5 per cent after warning it would be hurt by the virus and Boeing’s 737 Max problems.

Sunglasses maker EssilorLuxottica closed nearly 2 per cent lower after EU antitrust regulators on Tuesday extended their investigation into the company’s €7.2 billion bid for Dutch opticians group GrandVision by two weeks.

Wall Street

Wall Street added to losses on Tuesday with its three major stock indexes falling 1 per cent, after officials said the coronavirus was “a rapidly escalating epidemic”, a day after virus worries sent the S&P 500 and the Dow Industrials to their biggest daily declines in two years.

Macy’s fell 3 per cent despite reporting a smaller-than-expected drop in quarterly same-store sales. Mastercard shares fell 3.6 per cent after announcing chief executive Ajay Banga would step down at the start of the next year and be replaced by products head Michael Miebach.

HP surged 7 per cent, providing the biggest boost to the S&P, after saying it would step up efforts to slash costs and buy back stock, as it sought investor support to defend against a $35 billion takeover offer from Xerox.

Mallinckrodt jumped 21 per cent after the drug maker, whose headquarters are in Dublin, agreed to pay $1.6 billion to settle claims arising out of the US opioid crisis.

Additional reporting: Reuters