European stocks logged their worst week since the 2008 financial crisis on Friday, as investors alarmed by the mounting coronavirus epidemic rushed to offload stocks before the weekend.
The pan-European STOXX 600 index (^STOXX) was down by more than 13% when markets closed across the continent on Friday, its steepest weekly decline since October 2008.
London’s FTSE 100 (^FTSE) fell by more than 11% this week, similarly notching its worst week since the peak of the 2008 crisis.
Global stocks are now well into so-called “correction territory,” meaning that they have lost 10% since their recent all-time highs.
Losses continued across almost all major equities markets on Friday, as traders signalled that they expected the crisis to deepen over the weekend.
“Globally, equity benchmarks were pummelled remorselessly because of coronavirus fears — fear being the operative word here,” said Neil Wilson, the chief markets analyst of Markets.com.
“The selling has been indiscriminate, and this signals broad panic,” he said.
“As of the European close, US markets are assured of their worst week since the crisis, too. Wall Street looked to be closing out the week down over 12%.”
The World Health Organization (WHO) on Friday raised its risk assessment of the coronavirus impact and its potential impacts to “very high”, but said that it had not seen evidence that the virus was spreading freely enough for it to be a pandemic.
“What we see at the moment are linked epidemics of COVID-19 in several countries but most cases can still be traced to known contacts or clusters of cases,” said Tedros Adhanom Ghebreyesus, the director general of the WHO.
The continued spread of the virus nonetheless raises the spectre of far-reaching economic impacts, with economists significantly downgrading their European economic growth forecasts for 2020.
“Each day brings the risk of a surge in new cases in a new location. Market participants are averse to holding risk over the weekend for this reason,” said Wilson.
“Markets are still reacting to bad headlines,” noting that the key risk over the weekend was whether there would be a surge in European cases outside of Italy, or in the US.