Stocks across Europe sold off on Tuesday after a fourth person died from an outbreak of a new virus spreading rapidly across China.
An 89-year-old man in the Chinese city of Wuhan had died from a new strain of coronavirus, which causes pneumonia, the BBC reported Tuesday.
Over 100 cases of the new strain of coronavirus have been reported across China since early December and China’s health authorities confirmed Monday the virus can spread human-to-human.
The World Health Organisation will meet Wednesday to decide if they should declare a public health emergency, according to the BBC.
“Fears of an extended outbreak of a new strain of Coronavirus in Asia has been driving moderate risk-off behaviour across the board, especially with markets walking into Chinese New Year at the end of the week, a period well-known for increased cross-border travel,” said Bethel Loh, a macro strategist at ThinkMarkets.
Two Coronavirus cases have been reported in Thailand and one in Japan, according to the World Health Organisation (WHO). Australia has also begun screening passengers flying from China and one man has been quarantined while being tested, the Guardian reported.
“European airlines and airports stand to bear the brunt of the consequences that result from arguably less consumer demand to fly, use airports, or travel outside of one's home country,” Loh said.
Shares in British Airways-owner IAG (IAG.L) were down 1.8% in London and Lufthansa (LHA.DE) fell 2.1% in Frankfurt. Low-cost carriers EasyJet (EZY.L) and Ryanair (RYA.L) rose after strong results from EasyJet.
InterContinental Hotel Group (IHG.L) was one of the biggest fallers on the FTSE 100, down 3.2%.
Stocks of luxury goods manufacturers were hit hard. China is the biggest luxury goods market in the world and the outbreak may hit demands.
French luxury group Kering (KER.PA), which owns brands like Gucci and Yves Saint Laurent, fell 3.5% in Paris and LVMH (MC.PA), which owns Moet champagne, dropped 2.5%. Burberry (BRBY.L) declined by 3.3% in London.