European shares tumble to fourmonth low as virus risks grow

European shares fell to a near four-month low on Wednesday, as the fast-spreading coronavirus deepened fears about its impact on global growth with marquee companies sounding the alarm on earnings.

The main European equity benchmark STOXX 600 tumbled 2.6%, marking its first five-day losing streak since July. Travel stocks, financial services, chemical and technology stocks were among the worst hit, falling between 3% and 4%. The STOXX 600 is trading 9.4% below the record highs hit just last week, while the past four trading sessions has wiped out about $3 trillion in value of world stocks.

British spirits maker Diageo fell 3% after estimating an up to 200 million pounds hit to fiscal 2020 profit from the outbreak. Rivals Remy Cointreau SA and Pernod Ricard dropped 4.2% and 2.2%, respectively. Global miner Rio Tinto fell 1.8% after signaling that the outbreak may create challenging conditions in the next six months.

Latest data from Refinitiv shows

European companies are expected to report a 1.2% fall in profits in the fourth quarter, a bigger drop than previously expected, which would keep them stuck in a yearlong earnings recession.

The losses followed a grim session for Asia and Wall Street overnight after U.S. health officials warned Americans should prepare for possible community spread of the virus that has now hit Spain and dozens of countries from South Korea to Italy.

Asian shares fell as a U.S. warning to Americans to prepare for the possibility of a coronavirus pandemic jolted Wall Street yet again and pushed yields on safehaven Treasuries to record lows. The S&P 500 and the Dow Jones Industrial Average both shed more than 3% on Tuesday in their fourth straight session of losses. That led MSCI’s broadest index of Asia-Pacific shares outside Japan down 1.1%. Japan was among the worst-performing market in the region, weighed by growing concerns the virus could force the cancellation of the Tokyo Olympics.