European markets open lower; coronavirus, earnings in focus - CNBC

European markets opened lower on Thursday morning as the coronavirus epidemic remains the primary focus for investors.

The pan-European Stoxx 600 was around 0.4% lower at the opening bell, with every sector plunged into negative territory.

Food and beverage and China-exposed basic resources stocks led losses, with both sectors shedding almost 1%.

Shares of Credit Suisse were trading 1.7% lower despite the bank beating market expectations with its latest earnings on Thursday, posting a 69% increase in annual net income despite the spying scandal that emerged during 2019.

European shares had rallied to new highs on Wednesday as luxury stocks were lifted by a fall in the number of new coronavirus cases reported in China the previous day.

But the death toll and number of new cases recorded in Hubei province, the area at the center of the outbreak in China, rose sharply on Wednesday, according to figures from local health authorities.

The region reported an additional 242 deaths and 14,840 new cases for February 12, bringing the total number of people who have died amid the outbreak up to 1,310. The number of new cases rose dramatically after the province changed its method of reporting cases. The province said it is starting to include "clinically diagnosed" cases in its figures and that 13,332 of the new cases fall under that classification.

Investors are monitoring the situation and its potential effect on both the Chinese and global economies.

IMF Managing Director Kristalina Georgieva told CNBC on Wednesday the new strain of coronavirus was "clearly more impactful" on the world economy than the 2002-2003 SARS epidemic.

The outbreak has led to the closure of Chinese factories and businesses, resulting in a rise in demand for business loans. Major global airlines have suspended flights to mainland China, while events around the world, including Barcelona's Mobile World Congress, have been cancelled to prevent the virus spreading.

Chinese policymakers are taking steps to minimize the shock to China's domestic economy. The country's central bank announced last week that it will ease monetary policy, while the Chinese government rolled out tax guidelines on Tuesday to help reduce financial pressure in key sectors.

Asian shares dipped lower on Thursday on the back of the upturn in Hubei province's coronavirus cases, with Japan's Nikkei, Hong Kong's Hang Seng and mainland China's Shanghai and Shenzhen composites all trading in negative territory.

Back in Europe, British Prime Minister Boris Johnson is set to reshape his government on Thursday as the U.K. forges a future for itself outside of the European Union.

Politics also remains in focus in Ireland, where lawmakers are working to negotiate a new government after no political party managed to secure a clear majority in the country's election last weekend.

New data from the U.K.'s Royal Institution of Chartered Surveyors on Thursday showed that British house prices rose for the first time since July 2018 last month.

Earnings in focus

France's Rexel gained 7% during early morning trade, surging to the top of the European index.

Dutch insurer NN Group's shares were up 5% after the company reported its full-year operating result for 2019 increased 10% year-on-year.

Swiss chemical firm Clariant saw its shares rise by around 4.5%, after the firm announced it would cut 600 jobs following a profit plunge in 2019.

At the other end of the Stoxx 600, Centrica shares shed 12.6% after the company reported a loss of £1 billion ($1.3 billion) for 2019.

Shares of London-listed NMC Health tumbled 6% following a 32% rally for the stock earlier this week.

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https://www.cnbc.com/2020/02/13/european-markets-set-for-lower-open-coronavirus-earnings-in-focus.html

2020-02-13 06:05:00Z
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