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Eurpean Shares Tumble Led by Travel Stocks; No New Orders for Airbus

European plane maker Airbus failed to win any new aircraft orders in February, it said on Thursday, providing further evidence of disruptions across aviation industries from the global coronavirus outbreak.
James Hyerczyk

European shares picked up where they left off the previous session on Friday, following Wall Street’s lead lower, on fears that the widening spread of the coronavirus could trigger a global recession. Travel stocks were the biggest drag on the major European indexes, with the selling fueled by reports of no new orders for plane maker Airbus last month.

At 12:36 GMT, the U.K.’s FTSE 100 Index is trading 6501.63, down 203.80 or -3.04, Germany’s DAX Index is at 11540.68, down 404.04 or -3.38% and France’s CAC 40 Index is trading 5175.79, down 185.31 or -3.46%.

European Coronavirus Update

On Thursday, the U.K. registered its first death from coronavirus, while the death toll in Italy has hit 41, according to Reuters.

The Netherlands’ National Health institute on Friday confirmed the country’s first fatality as a result of the coronavirus outbreak. As of Thursday, the WHO reported 38 cases of the coronavirus in the Netherlands.

The Vatican confirmed its first case of the coronavirus on Friday, Reuters reported, with health authorities confirming outpatient services in Vatican City clinics had been suspended to sanitize areas.

As of Thursday, Italy had reported 3,089 cases of COVID-19, with 107 deaths.

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European Stock Watch

European plane maker Airbus failed to win any new aircraft orders in February, it said on Thursday, providing further evidence of disruptions across aviation industries from the global coronavirus outbreak. It is the second time in as many months that a leading manufacturer has failed to generate sales in a calendar month after Boeing drew a blank in January for the first time in decades, Reuters reported.

The epidemic could rob passenger airlines of up to $113 billion in revenue this year, the International Air Transport Association warned on Thursday.

Deutsche Bank fell 3.9% and Commerzbank slid 5.8% as the flight to safety pushed Germany’s benchmark 10-year Bund yield to a six-month low, within striking distance of last year’s record lows.

The travel & leisure index tumbled 3.8%, trading firmly in bear market territory, seen as a 20% drop from recent peak.

European Economic Data

In terms of data, Italian retail sales came in flat month-on-month in January after an increase in December. French trade balance figures came in at -5.89 billion Euros ($6.66 billion) in January versus a revised -3.72 billion in December. German industrial orders surpassed expectations to post a monthly climb of 5.5% in January.

European Central Bank to Trim Rates

Investors have almost fully priced in a 10 basis points cut by the European Central Bank (ECB) next week. However, a recent Reuters poll of economists showed the ECB will not cut rates, underscoring the central bank’s limited policy options, given its deposit rate is already at a negative 0.50%.

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