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European Shares Plunge On Virus Fears

stockmarkets aug16 24feb20 lt

European stocks tumbled on Monday after Italy became Europe's epicenter for coronavirus cases over the weekend.

Contagion fears gripped markets after an 84-year-old man has become the fourth person to die in the country from the virus outbreak.

Italian bank Intesa Sanpaolo has decided to close 4 branches in the country as the government imposed strict quarantine restrictions in two northern "hotspot" regions close to Milan and Venice.

About 50,000 people cannot enter or leave several towns in Veneto and Lombardy for the next two weeks without special permission.

The pan European Stoxx 600 plunged as much as 3.5 percent to 413.07 after declining half a percent on Friday.

The German DAX lost 3.9 percent, France's CAC 40 index shed 3.7 percent and the U.K.'s FTSE 100 gave up 3.1 percent.

Banks Commerzbank, Deutsche Bank, BNP Paribas, Credit Agricole and Societe Generale lost 3-6 percent as the yield on 10-year U.S. Treasuries fell to the lowest since 2016.

Automakers were also sharply lower on global growth concerns stemming from the coronavirus outbreak. BMW, Daimler, Volkswagen, Renault and Peugeot plummeted 5-6 percent.

Airline and travel-related stocks suffered heavy losses on fears over the coronavirus outbreak becoming a pandemic.

Holiday operator TUI lost about 9 percent, while airlines easyJet and Ryanair plunged 12 percent and 11 percent, respectively. British Airways owner International Consolidated Airlines gave up 7.3 percent.

Outsourcing firm Bunzl soared 4 percent after its pretax profit for 2019 rose 6.7 percent on higher revenue and margins

Associated British Foods fell over 2 percent. In a trading update for the 24 weeks ending 29 February, the company said that operating profit for Primark was expected to be "marginally down" on the prior year.

Barclays slumped 5.7 percent. The bank is preparing to start the search for a new chief executive officer to replace Jes Staley, the Financial Times reported.

In economic releases, Germany's business confidence improved in February, survey data from the ifo institute showed. The business climate index rose to 96.1 from 96.0 in the previous month.

The score was above the forecast of 95.3. The assessment of current situation weakened from last month, while expectations improved in February.

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