Coronavirus: Ryanair and EasyJet shares tank as travel fears hit
Ryanair and EasyJet shares tanked as the spread of the coronavirus strain into Italy raised the threat of vulnerable economies in Europe taking direct economic hits for the first time.
European airlines were among the largest losers as investors feared the consequences of potentially fewer tourists and business people travelling in Europe.
Ryanair in Dublin slid by over 13%, EasyJet in London tumbled 17%, shares in IAG --the owner of Aer Lingus, British Airways, and Vueling--shed 9%, and Air France-KLM and Lufthansa fell by up to 8.5%. Shares in travel giant TUI also tumbled by 10%.
Global stock indices slumped: The Ftse-100 in London lost 247 points, or 3.3%, and the Stoxx index that tracks Europe’s largest companies fell even more, by 3.7%.
The Iseq index of Irish shares fell further than many European stock markets -- dropping by 4.3%. Bank of Ireland shares fell 5% as it posted 2019 earnings and CRH, the global building products firm, shed 3.7%.
Other signals of global economic stress flashed red. The price of a barrel of crude oil slid by $2.40 to $56.10 on fears over European and global economic growth, and the price of gold soared to a seven-year high of over $1,677 an ounce, as investors sought havens for their money.
“Coronavirus concerns have hit markets hard today, with a more global reach raising fears that the virus cannot be contained as easily as many had presumed,” said Joshua Mahony, senior market analyst at online broker IG.
“A rising number of cases in Italy, Iran, and South Korea highlight the international nature of this virus, with many fearing that we are passing the point at which it can be contained. Most worryingly, the ongoing search for the ‘patient zero’ that brought the virus to the country means we could see cases ramp up and spread rapidly,” he said.
Experts had so far focused on the effects on European businesses from their disrupted supply chains with China. But Capital Economics said the weekend cases of the virus in Italy gave “another channel through which the virus could hurt the economy”, making “another recession in Italy more likely than not”.
“There will undoubtedly be a hit to Italy’s economy because the authorities have responded forcefully –and it is this response, rather than the illness itself, which reduces economic activity,” said its senior Europe economist Jack Allen-Reynolds.
Looking ahead, the risk to the eurozone now hinges as much on how rapidly the virus spreads at home as on developments overseas
