European markets plunged Thursday as investors reacted to President Donald Trump’s decision to impose restrictions on travel to the U.S. from some countries in Europe, and the European Central Bank’s decision not to cut interest rates.
The pan-European Stoxx 600 dropped 7.7% in afternoon trade, with travel and leisure stocks plummeting 11.2% following Trump’s announcement of a ban on European travel.
Trump said Wednesday that the U.S. will suspend all travel from Europe to the U.S. for 30 days to curb the spread of coronavirus. The new rules will go into effect on Friday night. The measures will affect 26 European countries that are part of the visa-free Schengen area. The U.K. and Ireland are exempted from the restrictions, as are American citizens who have undergone virus screening.
“These restrictions will be adjusted subject to conditions on the ground,” Trump said, blaming Europe for not taking adequate action to control the spread of the virus; Italy is the worst hit country outside China and a nationwide lockdown continues there.
The European Central Bank decided Thursday not to cut interest rates, despite market expectations for a reduction amid the ongoing coronavirus outbreak, which disappointed markets and deepened the session’s already significant losses.
The central bank did announce measures to support bank lending, and expanded its quantitative easing (QE) program by 120 billion euros ($135.28 billion).
The World Health Organization (WHO) declared the coronavirus outbreak a pandemic on Wednesday. There are at least 118,381 confirmed cases of the virus worldwide, according to the latest figures from the WHO. At least 4,292 people have died worldwide, the WHO said.
Biggest losers
Telecoms corporation Altice Europe led losses with a 24.4% plunge during afternoon trade, while Carnival stock dropped 22.7% after subsidiary Princess Cruises suspended operations on 18 ships for 2 months.
British cinema operator Cineworld cratered by more than 20% after warning on Thursday that it could breach its existing debt arrangements if the impact of the coronavirus over the next few months reaches a worst-case scenario.
Tullow Oil plunged 18.5% as oil prices continue to suffer amid concerns over a price war between OPEC and Russia,.
Source: Business - cnbc.com
