European shares sink again as virus pummels business

STOXX 600 index sinks 4.6% and goes back towards near seven-year lows

LONDON: European shares tumbled on Wednesday as fears over the relentless global spread of the coronavirus overshadowed sweeping stimulus measures to support businesses and contain the economic damage from the pandemic.

The pan-European Stoxx 600 index sank 4.6%, sending it back towards near seven-year lows hit in a massive global sell-off on Monday, with bourses in London and Germany leading declines.

Industrials posted among the heaviest losses following calls for a $60 billion bailout of the US aerospace industry, with JP Morgan analysts saying it will take years for the sector to recover.

Airbus tumbled 19.8% to its lowest since 2016, bringing its total declines in the quarter to nearly 60%. MTU Aero Engines and Rolls Royce plunged between 20.7% and 14.7%.

"Right now the predominant concern is that all the shutdowns of just about everything is going to lead to a recession," said Michael James, Managing Director of Equity Trading at Wedbush Securities in Los Angeles. "Those fears (are) far outweighing everything else."

European shares have lost more than 30% since hitting a record high mid-February as some countries in the bloc imposed national lockdown to halt the spread of COVID-19, the disease caused by the novel coronavirus.

Italy's prime minister on Tuesday declared the virus was causing a "socio-economic tsunami" as European leaders agreed to seal off external borders.

Following dramatic monetary easing by the world's biggest central banks, US President Donald Trump pressed on Tuesday for a $1 trillion stimulus package as many other governments looked to fiscal stimulus.

On the other hand, most Southeast Asian stock markets gave up early gains to end lower on Wednesday, as fears over the economic damage from the coronavirus contagion overshadowed stimulus measures from major central banks.

Markets across the region struggled to hold on to gains as a rising number of virus cases forced lockdowns and travel bans in a bid to restrict the spread of the virus.

"Financial markets have been volatile these past few days, to say the least," said Venkateswaran Lavanya, analyst at Mizuho Bank, in a note. "We still think that financial market contagion resulting in a self-perpetuating financial crisis remains a real and present danger."

Singapore stocks ended 1.2% lower, after rising more than 3% earlier, as worries emerged that the country may be headed towards its first full-year recession in nearly 20 years as Malaysia's travel ban robs the city-state of a key source of labour. The index ended lower for a sixth straight session.

Conglomerate Jardine Strategic Holdings dropped 3.6%, while real estate firm Capitaland eased 2.8%. Malaysia's bourse fell as much as 1.4%, as the country went into a two-week partial lockdown after a spike in coronavirus cases.