By Sruthi Shankar
(Reuters) – European shares resumed their slide on Friday as fears that the global spread of the coronavirus could trigger more curbs hit travel stocks, with the mood darkened by no new orders for planemaker Airbus last month.
The pan-European STOXX 600 <.STOXX> fell 2.5%, wiping out this week’s gains following the U.S. Federal Reserve’s emergency 50 basis point interest rate cut to shield the economy from the economic impact of the virus.
The travel & leisure index <.SXTP> tumbled 3.8%, trading firmly in bear market territory, seen as a 20% drop from recent peak.
“If this really ramps up, we could see a lot more kitchen- sinking updates from the travel industry and airlines,” said Chris Beauchamp, chief market analyst at IG.
“What’s impressive about the current move is it probably understates the degree of disruption we could be facing across the U.S. and Europe.”
The epidemic could rob passenger airlines of up to $113 billion in revenue this year, the International Air Transport Association warned on Thursday.
Planemaker Airbus Miners <.SXPP>, automakers <.SXAP>, oil& gas companies <.SXEP> and banking <.SX7P> sectors were trading in bear market.
Deutsche Bank The outbreak spread across the United States, surfacing in at least four new states on Thursday, while the UK recorded its first death.
The death toll in Italy, Europe’s worst-hit country, rose by 41 over the past 24 hours to 148, and the government said it would double the money pledged to help the economy cope with the epidemic. Investors have almost fully priced in a 10 basis points cut by the European Central Bank next week. However, a recent Reuters poll of economists showed the ECB will not cut rates, underscoring the central bank’s limited policy options, given its deposit rate is already at a negative 0.50%. Among other stocks, Italy’s Atlantia Infineon Technologies AG (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)