European stocks tanked on Monday as mounting fears about rapidly spreading coronavirus and falling crude oil prices rendered the mood extremely bearish.
oil prices crashed to 30-year lows after Saudi Arabia launched a price war on Russia following disagreement with regard to production cuts. It is feared that the price war could result in dangerous implications in oil sector.
Saudi Arabia announced a massive cut to its official selling prices for April and reportedly plans to increase oil production. The move by Saudi Arabia comes after OPEC and its allies failed to reach an agreement on additional production cuts last week.
West Texas Intermediate crude oil prices plunged to $27.34 a barrel, and despite regaining some lost ground subsequently, was still languishing deep down in the red at $32.80 a barrel, down more than 20% from Friday's close.
Meanwhile, in virus-related news, several countries are reportedly adding travel restrictions and in Italy more than 16 million people are literally locked in as 366 people are dead on Coronavirus infection. The Middle East countries are implementing restrictions such as shutting down of schools and shopping malls.
The pan European Stoxx 600 tumbled 7.44%. Among the major indices in Europe, the U.K.'s FTSE 100 drifted down 7.69%, Germany's DAX ended down 7.94% and France's CAC 40 plunged 8.39%. Switzerland's SMI declined 5.55%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkey lost 3 to 9%. Greece lost more than 13% and Italy shed about 11%.
In the French market, Technip plunged more than 23%. Societe Generale, ArcelorMittal, Credit Agricole, Total, Renault, BNP Paribas, Peugeot and Accor lost 10 to 17%.
In Germany, Deutsche Bank, Daimler, Covestro, BMW, Volkswagen, BASF, MTU Aero, Allianz, RWE, Deutsche Post, Linde, Wirecard, SAP, Bayer and Siemens declined 7 to 13%.
In the U.K. market, BP ended nearly 20% down. Royal Dutch Shell plunged 18.2%, Centrica lost 17.5% and Aveva Group ended down 17.2%.
Premier Oil crashed nearly 58%. Tullow Oil plummeted almost 32%. Cairn Energy, Enquest, Evergean Oil, Stobart, Aston Martin, Hunting and Pharos Energy lost 21 to 30%.
The Italian government ordered a virtual lockdown across much of its wealthy north, including the financial capital Milan, raising fears the lockdown could push the country into recession.
Germany's government announced measures including additional investment over next four years to boost the economy as the coronavirus, or COVID19, outbreak hurt activity.
"As a result of the coronavirus, no company in Germany should go bankrupt, nor should any job be lost as much as possible," the coalition said in a statement today. The measures were decided after talks late Sunday.
The European Union (EU) needs a "massive" economic stimulus package to fight with the negative impact of the coronavirus outbreak, French Finance Minister Bruno Le Maire said today.
Eurozone investor sentiment declined the most on record in March, reflecting fears of a global recession amid the spread of coronavirus, or COVID19, results of a closely watched survey revealed.
The investor confidence index dropped to -17.1 in March from 5.2 in February, the behavioral research institute Sentix said. The decline of 22.3 points was the sharpest within a month since the survey began. The reading was the lowest since April 2013.
Germany's industrial production rebounded at a faster than expected pace in January, data from Destatis revealed on Monday.
Industrial production grew 3% on a monthly basis, reversing a 2.2% drop in December. Production was forecast to grow moderately by 1.7%.
At the same time, industrial output fell 1.3% from last year, but slower than the 5.3% decrease logged in December. Economists had forecast an annual decrease of 3.8%.
Germany's exports remained flat in January from December, when shipments were up 0.2%, data from Destatis showed. Economists had forecast exports to grow 0.8%. Meanwhile, imports grew 0.5%, following a 0.3% drop in December. Imports were forecast to gain 0.6%.
Consequently, the trade surplus declined to a seasonally adjusted EUR 18.5 billion from EUR 19 billion a month ago.
France is likely to expand at a slower than previously projected rate in the first quarter, according to a monthly survey from Bank of France. Gross domestic product is forecast to grow 0.1% in the first quarter, revised down by 0.2 percentage points.
Switzerland's unemployment rate remained stable in February, the State Secretariat for Economic Affairs, or SECO, showed on Monday. The jobless rate held steady at a seasonally adjusted 2.3% in February, in line with expectations. On an unadjusted basis, the unemployment rate fell to 2.5%.
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