European stocks suffered their worst day since 2016 on Monday as coronavirus infections climbed in Italy, the eurozone’s third-largest economy.
Italy on Monday became the epicentre of the outbreak on the European continent, and officials on Sunday moved to lock down around a dozen towns in the country’s northern Lombardy and Veneto regions.
There have been hundreds of confirmed cases in Italy, and seven people have died from coronavirus-related illnesses in the country.
Some 50,000 inhabitants are thought to be affected by a series of “urgent measures” announced on Sunday, including restrictions on moving in and out of the affected areas.
Schools and universities have been ordered shut for at least a week, while museums and cinemas have also been closed in the regions.
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“Italy’s lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected,” said Russ Mould, investment director at AJ Bell, on Monday.
European stocks, which had not been too affected by the spread of the virus in Asia, are getting their “comeuppance,” said David Madden, a market analyst at CMC Markets UK.
“European equity benchmarks were too complacent when the health crisis was raging in China,” he said.
“The tourist industry is receiving a thrashing as traders are fearful there will be a major drop-off in people going on holidays, or even traveling in general. At the early stages of the health emergency, the airlines that focus on Europe — EasyJet and Ryanair, held up all right, but now they are in the firing line.”