UPDATE 1-Milan stocks eye worst day since 2016 as virus pandemic fears batter Europe


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Feb 24 (Reuters) – Italian shares slumped 4% on Monday, leading a selloff in European stock markets, as a jump in number of coronavirus cases outside of China heightened fears the outbreak will take a bigger toll on global growth than anticipated.

Milan shares were on course for their biggest percentage loss since June 2016 as Italy saw the biggest flare-up of coronavirus cases in Europe, with three people dying of the illness since Friday and more than 150 cases reported.

The pan-European STOXX 600 and all the major regional indexes were down over 3%.

The benchmark index has dropped 4.4% since hitting a record high of 433.90 last week on hopes major central banks will work on more stimulus to counter a slowdown.

The euro zone money markets have priced in around a 50% chance that the European Central Bank will cut interest rates by 10 basis points in July.

Among the worst performers on the STOXX 600 were airline stocks, with EasyJet, Ryanair, Air France and Lufthansa down between 7% and 9%. Europe’s travel & leisure index tumbled 4.5%.

Luxury goods makers, miners, automakers, technology and banking shares all sensitive to global growth sentiment were down more than 3%.

Primark-owner Associated British Foods slid 1.3% as it warned of potential supply shortages on some lines later in the 2019-20 financial year if delays in factory production in China are prolonged due to coronavirus.

The focus now shifts to the release of Ifo institute’s business climate index for February, expected to inch lower to 95.3 points from 95.9 points in January.

“Due to the fact that the number of coronavirus cases increased rather late in February, the impact of this on business sentiment may not yet be fully reflected in the results of the Ifo’s survey,” UniCredit analysts wrote in a note.

Shares in Juventus slumped 9% after the Serie A leader posted a net loss of 50.3 million euros in the first half, compared to a profit a year earlier.

Barclays fell 5.6% after the Financial Times reported the British bank was gearing up to start the search for a new top boss to replace Chief Executive Officer Jes Staley.

Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj


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