Stocks – Europe Crashes Again on U.S. Travel Ban, Italy Lockdown

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By Geoffrey Smith — Europe’s stock markets opened sharply lower on Thursday after Italy enforced a shutdown of all non-essential commerce and President Donald Trump banned travel to the U.S. from most of Europe in response to the coronavirus pandemic.

By 4:10 AM ET (0810 GMT), the benchmark was down 17.4 points or 5.2%, while the U.K. was down 5.0% and the German was down 5.4%. Italy’s , bracing for a severe recession as a result of the national lockdown, fell 5.9%.

Travel sector names were once again worst hit. British Airways owner IAG (LON:) fell 16.3% and Lufthansa fell 9.9%, while cruise operator Carnival (NYSE:) fell 15.4%. In Germany, energy giant RWE fell 12%, while in France, Airbus fell 8.8%.

The Italian action and Trump’s speech were only two events that shook markets on Wednesday, a transformational day for global perceptions of the coronavirus. The World Health Organization finally declared the outbreak a pandemic, which makes little immediate difference to its policy guidelines, but which opened the door to further emergency measures across the world that are likely to have a severe impact on the global economy.

Thursday’s main scheduled event for markets is the European Central Bank’s policy meeting, the results of which are due at 8:45 AM ET (1245 GMT). President Christine Lagarde will hold a press conference 45 minutes later.

The ECB is expected to cut its key interest by 10 basis points and announce various additional  measures aimed at easing liquidity, especially to small and medium-sized enterprises, analogous to the Term Funding Scheme announced on Wednesday by the Bank of England.

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