European markets continued their sell-off Wednesday with the coronavirus outbreak continuing to weigh on global investor sentiment.
The pan-European Stoxx 600 pared back some of its early losses to trade 1.3% lower just before noon, with travel and leisure stocks dropping 3.3% to lead losses as all sectors and major bourses traded in negative territory.
The spread of the coronavirus continues to rattle global markets; overnight, Australia led the losses among major Asia Pacific markets as investors withdrew amid concerns over the outbreak. Shares of Australian banks saw declines of around 2%.
On Tuesday, a top U.S. health official said the coronavirus will likely become a global pandemic. Anne Schuchat, principal deputy director of the Centers for Disease Control and Prevention, told reporters that, “It’s not so much a question of if this will happen anymore, but rather more a question of when this will happen.”
China, the epicenter of the outbreak, reported 406 new confirmed cases and an additional 52 deaths as of Feb. 25. Meanwhile, South Korea, where there is the second largest outbreak, reported a jump of 169 new cases, bringing the country’s total to 1,146 infected. It reported one additional death, bringing the total number of fatalities to 11.
In Europe, Italy remains the key concern for the region with the virus now having spread south, beyond its initial outbreak in the northern regions of Lombardy and, to a lesser extent, Veneto.
As of Wednesday morning, the country has 325 confirmed cases of the virus and 11 people have died, Italian media report. Prime Minister Giuseppe Conte has called for calm and less sensationalist reporting, saying Tuesday: “It’s time to turn down the tone, we need to stop panic,” newspaper La Repubblica reported. There are concerns the virus will tip Italy’s already fragile economy into recession.
New coronavirus cases have emerged across Europe, most recently in Austria, Switzerland and Spain.
Lufthansa on Wednesday began a substantial cost savings program, including the suspension of new recruitment, as Germany’s largest airline looks to counter the business impact of the coronavirus outbreak.
On the data front, French consumer confidence slightly exceeded expectations to remain stable in February at a reading of 104, according to France’s official statistics agency.