Global equity markets tumbled and the dollar slid on Thursday as the number of coronavirus cases outside China mounted rapidly, leading California to declare an emergency and HSBC in London to send more than 100 staff home. Italy's UniCredit also told some staff to go home, while corporations around the world began issuing profit warnings, with Southwest Airlines saying it expected a hit of up to $300 million (€268 million) to its first-quarter operating revenue. In a sign of deep damage to the travel industry, British regional airline Flybe collapsed, making the struggling carrier the industry's first big casualty of the outbreak. British commercial broadcaster ITV fell 12 per cent after warning that ad revenue for April could fall by about 10 per cent as travel companies deferred campaigns. "I thought 2020 would be the year of the election but it turns out it's the year of the virus, and it's going to dominate everything in the global economy this year," said David Kelly, chief global strategist at JP Morgan Asset Management.
Another coronavirus-dominated session saw Dublin's Iseq index slip 1.4 per cent to 6,447. Ryanair led the slide, shedding 5 per cent to close at €11.25. Airline stocks have been hit worst by the coronavirus. Irish Ferries owner Irish Continental Group fell almost 4 per cent after being up nearly 4 per cent in the session despite reporting higher revenues and earnings for the year to the end of December. Food group Glanbia traded marginally down at €10.89, erasing gains from earlier in the week. Shares in construction company Cairn Homes fell 4 per cent after it reported an annual operating profit of €68 million earlier in the week. Packaging group Smurfit Kappa fell 1.5 per cent to €30.88 along with the global shift downwards. Elsewhere Bank of Ireland and AIB were down 1.9 per cent and 3 per cent respectively.
London's blue-chip index ended its three-day winning streak on Thursday, with investors spooked by concerns over global economic growth as more businesses were bruised by the coronavirus outbreak. The Ftse 100 index fell 1.6 per cent and the midcap index closed the session 2.1 per cent lower. The fall in the top index was led by broadcaster ITV, which slumped 12 per cent after it warned of lower ad revenue in April. Cruise operators Carnival's London-listed shares sank 7.3 per cent after its Grand Princess ocean liner was barred from returning to its home port of San Francisco on coronavirus fears after at least 20 people aboard fell ill. Asia-focused bank Standard Chartered, house builder Persimmon, and miners BHP Group and Rio Tinto, which were all trading without dividend entitlement, dropped 4.7-7.1 per cent. Shares in British Airways and Aer Lingus owner IAG fell 5.3 per cent, while EasyJet was 4.4 per cent lower after an industry body warned that the coronavirus epidemic could rob passenger airlines of up to $113 billion in revenue this year, more than three times a projection it made just two weeks ago.
European shares snapped a three-day gaining streak on Thursday as concerns over the scale of economic damage caused by the coronavirus outbreak overtook optimism over support from monetary stimulus. Broader bank stocks retreated in the face of steadily dropping bond yields. Ratings agency Fitch said on Thursday the spread of the coronavirus in the EU opened new channels for it to affect the regional economy and heightens its adverse impact on GDP growth.
Among stocks in the black was German food delivery firm Hellofresh, which was one of the top gainers on the Stoxx600 after JP Morgan upgraded the stock.
US stock indexes fell sharply on Thursday as the swift spread of the coronavirus in the United States led California to declare an emergency, while airline stocks were hammered by crippled travel demand. The S&P 500, which fell almost 12 per cent last week, its worst since the 2008 financial crisis, had recovered some poise as Joe Biden's surge in the Democratic primaries distracted traders from the widening impact of the virus. The benchmark index, however, is still about 9 per cent below its record close on February 19th, and fears about the economic fallout remain at the forefront of investors' minds.
The S&P 1500 Airlines Index shed 5.8 per cent after the International Air Transport Association flagged a potential $113 billion hit to global airline revenue. US airline Southwest slipped 3.9 per cent after issuing a revenue warning, while United Airlines and JetBlue Airways cut flights and implemented cost controls. – Additional reporting: Reuters