Europe open: Travel and leisure stocks drag amid coronavirus concerns
By Alexander Bueso
Date: Thursday 23 Jan 2020
(Sharecast News) - Stocks on the Continent started the morning lower amid continuing worries that a new coronavirus in China might spread further and weigh on the country's economy.
On Thursday morning, authorities in China announced the decision to lockdown most transport in the cities of Wuhan and Huanggang, two of the cities where the new sickness was concentrated in.
The concern was that the millions of Chinese moving around the country and the region ahead of the Lunar New Year might spread the virus further.
"Traders are a little on the nervous side in light of the news the coronavirus situation is getting worse. The death toll in China has ticked up to 17 and there are nearly 600 confirmed cases of the infection," said David Madden at CMC Capital Markets UK.
"Traders are cutting their exposure to stocks for fear the health crisis will spread. Stocks in the tourist trade that have operations in the Far East such as Intercontinental Hotels and International Consolidated Airlines are lower this morning."
Against that backdrop, as of 1000 GMT Germany's Dax was trading lower by 0.65% to 13,427.53 and the French Cac-40 by 0.37% to 5,990.71.
Travel and Leisure stocks were particularly unwanted, with the Stoxx 600 sector gauge falling 1.40% and that for Oil&Gas by 0.54%. Basic Resources shares were also getting pummeled due to the worries around Chinese growth, at least in the near-term.
Front month Brent crude oil futures were sliding alonside, retreating by 1.74% to $62.13 a barrel on the ICE.
At the individual company level, Denmark's Novozymes was pacing gains on the Stoxx 600 after the enzyme maker's better-than-expected quarterly operating profits.
On the economic calendar for Thursday, the European Central Bank was scheduled to announce its latest policy decision at 1245 GMT.
And at 1500 GMT, the European Commission was due to release its consumer confidence index for the euro area referencing the month of January.
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