European stocks drifted lower in volatile trading on Tuesday as markets failed to set a floor after the pounding they took over the spread of the coronavirus in Italy and South Korea.
A day after a 5.4% drop that was the worst single-day percentage fall in more than three years, Italy’s FTSE MIB
fell 0.7% to 23259.18. Banco BPM
and Juventus Football Club
each lost over 3%.
The Stoxx Europe 600
which ended Monday at its third-lowest level of the year, slipped 0.5% to 410.01.
The spread of the coronavirus in Italy is particularly worrying since the country has not identified the so-called patient zero who spread it.
South Korea now has 977 confirmed cases to Italy’s 232, according to the Covid-19 tracker from Johns Hopkins. Mainland China has 80,242 confirmed cases.
“Given the incubation period of the virus, the next two weeks will be critical in determining the extent of the outbreak, the steps authorities are willing and able to take to contain it, and the economic effect of those measures,” said Mark Haefele, global chief investment officer of wealth management at UBS, which prefers emerging market equities over eurozone stocks.
U.S. stock futures
nudged higher on Tuesday following the 1,031-point annihilation in the Dow Jones Industrial Average
The yield on the German 10-year bund
fell three basis points to -0.51%. Yields move in the opposite direction to prices.
Of stocks on the move, U.K. insurer Prudential
rose 1.9% after the activist investor Third Point disclosed it was the company’s second-largest shareholder and called on it to separate its U.S. business, Jackson National Life Insurance, and Asian arm, Prudential Corp. Asia.