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The pan-European Stoxx 600 closed provisionally down by around 0.5%, with most sectors and major bourses in the red. Basic resources stocks shed 2.1% to lead losses while telecoms shares bucked the trend to climb 1.1%.
Tech giant Apple on Monday warned that it does not expect to meet its second-quarter revenue forecast due to lower global iPhone supply and weakened Chinese demand and production as a result of the coronavirus outbreak.
As of Monday night, China’s National Health Commission said a total of 72,436 people are confirmed to have contracted the new coronavirus and 1,868 have died.
Apple suppliers led a sell-off in Asia overnight, with shares in Hong Kong, Japan and South Korea all tumbling more than 1.3%. On Wall Street, shares also slumped with the Dow Jones Industrial Average down 240 points by the time of Europe’s close.
Euro zone finance ministers met Monday to discuss fiscal policy options in a bid to boost the bloc’s sluggish economy, with fears of a downturn growing in the wake of the coronavirus outbreak.
On the data front, U.K. employment jumped again in the final quarter of 2019, seemingly defying a broader economic slowdown. However, total earnings growth including bonuses rose by an annual 2.9%, its weakest increase since the third quarter of 2018.
The ZEW economic sentiment index showed that German investor confidence deteriorated drastically in February amid fears over the impact of the coronavirus on global trade. The monthly survey showed economic sentiment fell to 8.7 from 26.7 in January, against analyst expectations of a 21.5 reading.
Stocks on the move
Individual share price action was also being driven by earnings reports and news of corporate deals across the euro zone.
HSBC reported on Tuesday that it had missed 2019 earnings expectations to record a 32.9% fall in pre-tax profit. Europe’s largest bank also announced a major overhaul that will result in 35,000 job cuts over the next three years. The firm’s London-listed shares tumbled almost 7% to the bottom of the Stoxx 600.
French rail company Alstom has agreed to acquire the rail division of Canada’s Bombardier in a deal worth up to $6.7 billion. Alstom shares slid 3% lower.
Italian bank Intesa Sanpaolo on Monday launched a 4.86 billion euro ($5.3 billion) takeover bid for domestic rival Ubi Banca. Ubi Banca shares surged 23% to lead the Stoxx 600, while Intesa added almost 2%.
Germany’s Thyssenkrupp has identified two potential private equity consortia for the sale of its 16 billion euro elevator unit, after Finland’s Kone pulled out of the deal. Thyssenkrupp shares fell 5%.
European semiconductors suffered the brunt of the fallout from the Apple announcement. Dialog Semiconductor and ASMI both dropped more than 4% while STMicro and AMS also declined.