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Early gains fade for European shares as virus fears weigh

European shares edged lower today after recording their worst losses since June 2016 in the previous session.

Trading was still dominated by concern that the coronavirus outbreak is spreading fast outside China.

After opening up about 0.4%, the pan-European STOXX 600 shed those gains more than hour into trading to trade 0.3% lower. 

Banking shares were among the biggest drags, while car makers dropped 1.2% as investors worried Europe’s trade-reliant economy would take a bigger toll from the outbreak than previously thought.

After a 5.4% tumble yesterday, Milan-listed shares rose 0.6% in opening trade. But it then reversed those earlier gains to stand 1% lower. 

Italy is struggling with the worst flare-up of coronavirus cases in Europe, with 220 cases reported and seven dead. 

Shares in Frankfurt, Paris and London also reversed their earlier gains to stand 0.8%, 0.9% and 0.75% lower respectively.

The Dublin market was down 0.5% in late morning trade after opening with gains of 0.67% earlier this morning.

Traders knocked about $500 billion off the value of European companies yesterday after Italy unveiled it was struggling with the worst flare-up of coronavirus cases in Europe, reporting 220 cases and seven dead.

Asian markets were mixed today as bargain-buying after the previous day’s bloodbath tempered fears that the new coronavirus will develop into a pandemic and hammer the global economy.

Tokyo led losses as markets reopened to play catch-up with Monday’s global sell-off. The Nikkei ended more than 3% lower, while Sydney and Wellington each shed more than 1%. 

There were also losses in Bangkok and Jakarta. 

However, Hong Kong added 0.3%, while Seoul jumped 1.2%, having plunged almost 4% yesterday in reaction to a spurt of infections in South Korea at the weekend. 

Wall Street plunged last night as investors ran for safety after a surge in coronavirus cases outside China fanned worries about the global economic impact of a potential pandemic. 

The benchmark S&P 500 index and the blue-chip Dow turned negative for the year to date and the Dow dropped more than 1,000 points, only the third time in its history for such a large decline in one day. 

Both the Dow and the S&P clocked their biggest one-day percentage declines since February 2018. 

The technology heavy Nasdaq had the biggest percentage drop, closing 3.71% lower.

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