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European Shares Set For Weak Open As Coronavirus Fears Rise

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European stocks are set for a free fall at start on Monday as investors fret about the effects of the fast-spreading coronavirus outbreak on China and the global economy.

The death toll from China's new coronavirus grew to 80 Sunday, with more than 2,700 people infected globally.

According to preliminary data, there was a 41.6 percent decline in civil air travel, a 45.5 percent drop in rail travel and a 25 percent drop in road travel on the first day of the Lunar New Year holiday.

China extended the week-long Lunar New Year holiday by three days to Feb. 2 to "reduce mass gatherings" and "block the spread of the epidemic." Hong Kong said it would ban entry to people who have visited Hubei province in the past 14 days.

Most Asian markets remain closed for the Lunar New Year holiday. Japan's Nikkei index fell more than 2 percent as mounting concerns over the economic impact of the spreading coronavirus spurred demand for safe-haven assets such as gold, the Japanese yen and Treasury notes.

Apart from news on the coronavirus front, investors also watch out for the U.S. Fed and Bank of England's monetary policy meetings this week for directional cues.

On the data front, a slew of U.S. economic data is scheduled to be released this week, including reports on new home sales, durable goods orders, consumer confidence, pending home sales, personal income and spending.

Business confidence survey data from Germany is due later in the session, headlining a light day for the European economic news. The business confidence index is expected to rise to 97.0 in January from 96.3 in December.

West Texas Intermediate Crude oil futures slumped a further 2 percent to multi-month lows in Asian trading today after ending down 2.5 percent on Friday amid rising concerns about the outlook for energy demand and excess supply in the market.

U.S. stocks ended firmly in the red on Friday as virus-contagion worries outweighed earlier optimism over strong corporate earnings results from Intel and American Express.

The Dow Jones Industrial Average dropped 0.6 percent, while the tech-heavy Nasdaq Composite and the S&P 500 both shed around 0.9 percent.

European markets posted strong gains on Friday after the World Health Organization said it is too early to declare the coronavirus attack a global health emergency.

The pan European Stoxx 600 gained 0.9 percent. The German DAX surged 1.4 percent, France's CAC 40 index rose 0.9 percent and the U.K.'s FTSE 100 jumped 1 per cent.

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