European shares down on weak earnings and China virus

European shares fell for the first time in three sessions on Thursday on a slate of disappointing earnings updates, with investors also fretting over the economic impact of a virus epidemic in China that has now claimed 170 lives.

The pan-European STOXX 600 fell 0.8% and was on track to log its worst week in nearly four months. London-listed shares of Royal Dutch Shell were the biggest drag on the benchmark index, shedding 4.3% after the company’s quarterly profit halved. The wider energy subsector fell 2.4%, also pressured by lower oil prices.

Global financial markets have seen a sharp sell-off this week as a jump in reported cases of people infected with the flu-like coronavirus raised fears of a pandemic and sparked concerns about an economic slowdown in the world’s second-biggest economy.

The World Health Organization’s Emergency Committee is due to reconvene on Thursday to decide whether the virus constitutes a global emergency. European miners slid 0.7% on Thursday on growth concerns in the world’s top metals consumer.

Losses in flight operators such as British Airways, Germany’s Lufthansa and Air France dragged the travel and leisure sector down 0.8% as airlines increasingly suspended or scaled back flights to China. Shares of watchmaker Swatch Group slipped 4.7% as it reported a marked drop in annual sales and forecast continuing challenges in its key Hong Kong market this year.

On a bright note, Sweden’s H&M climbed 9.5% after delivering its first increase in annual profit since 2015, while Finnish engineering group Wartsila jumped 6.4% as it raised its quarterly demand outlook.

Investor attention now shifts to the Bank of England’s interest rate decision due later in the day, with expectations of the first rate cut in more than three years standing at nearly 50%.

This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.