Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Why the 'devil' coronavirus has hit European stocks hard

Stock MarketsJan 31, 2020 10:03AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Thyagaraju Adinarayan and Julien Ponthus

LONDON (Reuters) - The coronavirus scare has wiped $1.2 trillion from global stock markets in the last two weeks as new cases of the deadly virus multiplied, stoking fears of an economic slowdown spreading from its Chinese epicenter to the rest of the world.

With the death toll rising to 213 despite travel restrictions, the impact was most evident in European equity markets in shares of companies which pocket the bulk of their revenues from China, the world's fastest-growing consumer market.

The pan-European STOXX 600 index (STOXX) is poised for its biggest weekly loss in four months, while among individual stocks Germany's Infineon (DE:IFXGn), which gets two-thirds of its revenue from China, has fallen 10% despite strong quarterly results from Apple (O:AAPL), its biggest customer.

The Goldman Sachs' "China exposure" basket of European stocks has slumped 5% this week alone.

Elsewhere Electrolux (ST:ELUXb) shares dropped on Friday after the group warned the outbreak would hit its sourcing of products and components from China. Supply chains are seen as among the key issues arising from the virus, with companies as diverse as Apple, Starbucks (O:SBUX) and Autoliv (N:ALV) warning of potential disruption.

Major names in travel, luxury and retail globally have also been hit as hundreds of millions of people who were preparing to travel for the Chinese holidays canceled their plans.

Royal Caribbean Cruises (N:RCL) shares for instance have lost 12% of their value since Jan. 17 and the company has warned that its 2020 earnings would be impacted by cancellations.

Yet the virus - which Chinese President Xi Jinping has described as a "devil" - has had a bigger impact on European companies than their U.S. peers due to their high exposure to China.

Analysts have drawn comparisons with the deadly SARS outbreak in 2002-2003, but the read-across is limited as China's share of global gross domestic product has quadrupled since then to 16%.

GRAPHIC: European companies with high exposure to China -

Several global airlines canceled flights to China and in Europe shares of long-haul operators Air France (PA:AIRF) and Lufthansa (DE:LHAG) have been on the decline for the past two weeks.

In the hospitality sector, Intercontinental Hotels Group (L:IHG) and Accor (PA:ACCP) were also beaten down.

GRAPHIC: Airlines, hotel stocks slide on Coronavirus outbreak -

Topping it all, the non consumer-facing mining sector was the hardest hit in Europe, falling 8% on concerns that the coronavirus will cut China's gigantic appetite for commodities.

The graphic below shows how Europe's miners have among the biggest revenue exposures to China.

GRAPHIC: Mining exposure to China -

Why the 'devil' coronavirus has hit European stocks hard

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email