Europe Surrendered to the Virus - Airlines and BASF Issued a Warning

Europe Surrendered to the Virus - Airlines and BASF Issued a Warning

Among the growing fears that the coronavirus will turn into a comprehensive universal epidemic that will harm the world economy, European stock markets are surrendering to the virus. Euro Stoxx 600 is losing 14.9 points, with 374.58 points on its way to the worst week it has had since the 2008-9 financial crisis. Since the Stoxx 600 index reached 433.9 points, it has declined by about 14% in the last nine sessions. Following Wall Street's remarkable losses on Thursday, DAX lost 4.3% and FTSE 100% 3.7, but heavy gunshots of the virus's impact on the business this year have also put pressure. International Airlines Group (LON: ICAG), the owner of British Airways and Iberia, said that it will reduce its capacity by 2% this year in response to falling demand, while EasyJet warned that it is facing a "big drop" in demand for a route to northern Italy, like other European countries. Prior to this news, a warning was issued that JPMorgan Chase (NYSE: JPM), L’Oreal (PA: OREP) and Nestle (SIX: NESN) limit business travel as personnel. While IAG (LON: ICAG) fell 8.0%, EasyJet saw a huge loss before the stock rolled flat. They declined 23% and 29%, respectively - the British tour group Dart Group (LON: DTG), which was also attracted by Jet2 customers, did not suffer as much as amongst the tourists who remained closed in Tenerife: their shares fell 40% this week. Chemical giant BASF (DE: BASFN), a pioneer in Germany that sells products to the business sector at a wide range, warned: “We expect global economic uncertainty to be too high for 2020 and growth to be largely disrupted by a drop in demand and production cuts associated with the coronavirus outbreak. " As a result, it stated that it does not expect to acquire a 9% capital cost this year. UBS Wealth Management senior economist Paul Donovan said: “The main thing now is that consumer behavior has been significantly affected. We know that the supply chain has been disrupted and China's domestic demand has been affected. The issue is whether the U.S. and European consumers are changing demand due to fear of viruses. Economically, the virus itself is not an issue. ” Donovan stated that the virus left private and public consumption as the only factor to support expansion by hitting the world economy at a time when the trade war between China and the USA was sterilizing the business investment, which was actually the source of growth. He said, however, that the predictions put forth underestimate the "human resistance" that leads to the rapid recovery of economic activity and is stronger than expected.