European shares down as coronavirus fears intensify

European stock markets headed lower on Monday, as fears about the economic hit from the coronavirus pandemic intensified with several nations extending near-total lockdowns.

The pan-European STOXX 600 index was down 0.9%, with autos, financials and insurers shedding between 1.2% and 2.3%. The banking index slumped another 2.7%, bringing its total losses for the month to nearly 30%, as lenders complied with the European Central Bank’s call to freeze dividends in a bid to shore up credit.

The benchmark European index ended Friday with one of its best weekly percentage gains since the 2008-09 financial crisis, as a raft of global stimulus measures offered hope that the economic damage from the outbreak could be contained. However, the index was still set for its worst first quarter on record, losing more than $3.3 trillion in value, as a rapid increase in the number of coronavirus cases forced governments to extend containment measures that have brought business activity to a grinding halt.

The speed with which the virus has spread across the globe has raised fears of a slate of corporate defaults, resulted in mass layoffs and brought whole sectors to the brink of collapse. Travel and leisure stocks, among the worst hit from the virtual halt in global travel, tumbled 2.3% on Monday as JP Morgan forecast a 42% slump in aftermarket sales in the European civil aerospace sector in 2020.

London-listed stocks led declines among the major country indexes as a senior medical officer said the lockdown in Britain could last for months. Swiss engineering group ABB fell 5.2% after it issued a profit warning and said all of its businesses would suffer in the first quarter.

Asian shares slipped and oil prices took another tumble as fears mounted that the global shutdown for the coronavirus could last for months, doing untold harm to economies despite central banks’ best efforts.

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.