European markets: coronavirus, earnings in focus


European markets opened lower on Thursday morning as the coronavirus epidemic remains the primary focus for investors.

The pan-European Stoxx 600 was around 0.4% lower with every sector in negative territory.

Food and beverage and China-exposed basic resources stocks led losses, with both sectors shedding almost 1%.

Shares of Credit Suisse were trading 1.7% lower despite the bank beating market expectations with its latest earnings on Thursday, posting a 69% increase in annual net income despite the spying scandal that emerged during 2019.

But the death toll and number of new cases recorded in Hubei province, the area at the center of the outbreak in China, rose sharply on Wednesday, according to figures from local health authorities.

The region reported an additional 242 deaths and 14,840 new cases for February 12, bringing the total number of people who have died amid the outbreak up to 1,310. The number of new cases rose dramatically after the province changed its method of reporting cases. The province said it is starting to include “clinically diagnosed” cases in its figures and that 13,332 of the new cases fall under that classification.

Investors are monitoring the situation and its potential effect on both the Chinese and global economies.

IMF Managing Director Kristalina Georgieva told CNBC on Wednesday the new strain of coronavirus was “clearly more impactful” on the world economy than the 2002-2003 SARS epidemic.

The outbreak has led to the closure of Chinese factories and businesses, resulting in a rise in demand for business loans. Major global airlines have suspended flights to mainland China, while events around the world, including Barcelona’s Mobile World Congress, have been cancelled to prevent the virus spreading.

Chinese policymakers are taking steps to minimize the shock to China’s domestic economy. The country’s central bank announced last week that it will ease monetary policy, while the Chinese government rolled out tax guidelines on Tuesday to help reduce financial pressure in key sectors.

Back in Europe, British Prime Minister Boris Johnson is set to reshape his government on Thursday as the U.K. forges a future for itself outside of the European Union.

Earnings in focus

France’s Rexel gained 7% during early morning trade, surging to the top of the European index.

Dutch insurer NN Group’s shares were up 5% after the company reported its full-year operating result for 2019 increased 10% year-on-year.

Swiss chemical firm Clariant saw its shares rise by around 4.5%, after the firm announced it would cut 600 jobs following a profit plunge in 2019.

At the other end of the Stoxx 600, Centrica shares shed 12.6% after the company reported a loss of £1 billion ($1.3 billion) for 2019.

Shares of London-listed NMC Health tumbled 6% following a 32% rally for the stock earlier this week.



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