European markets down from record highs

World stocks markets were knocked off record highs on Tuesday as two of the world’s mega companies reported damage from the coronavirus outbreak.

Apple’s stock fell almost 6% in Frankfurt and all Europe’s main markets fell after the iPhone maker warned it was unlikely to meet the March quarter sales guidance it had set just three weeks ago. HSBC announced a massive restructuring that involved shedding $100 billion of assets and slashing 35,000 jobs over three years. It also warned about the impact of the coronavirus on its Asia business. The stock fell more than 2% in Hong Kong trade.

The warning from Apple sobered investors who had hoped stimulus from China and other countries would protect the global economy from the effects of the epidemic.

Europe’s 0.4% to 0.5% declines came after Tokyo’s Nikkei dropped 1.4% as tech stocks globally reacted to Apple’s warning. China’s gave up 0.5% after gaining on Monday, encouraged by a central bank rate cut and government stimulus hopes.

The euro was near a threeyear low versus the dollar at $1.0830, before Germany’s ZEW survey, which is expected to fuel growing pessimism about Europe’s largest economy.

Also hurting market sentiment were a reports that U.S. President Donald Trump’s administration was considering changing regulations to allow it to block shipments of chips to China’s Huawei from companies such as Taiwan’s Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker.

The number of new coronavirus cases in mainland China fell below 2,000 for the first time since January, but the virus remains far from contained. The death toll in China has climbed to 1,868, the National Health Commission said, and the World Health Organization said “every scenario is still on the table” in terms of the epidemic’s evolution.

As China’s authorities try to prevent the spread of the disease, the economy is paying a heavy price. Some cities remain locked down, streets are deserted, and travel bans and quarantine orders are preventing migrant workers from getting back to their jobs.

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.