European Shares Enter Bear Market Territory

European stocks plunged on Monday to enter bear market territory after the Italian government ordered a virtual lockdown across much of its wealthy north, including the financial capital Milan, raising fears the lockdown could push the country into recession.

Germany’s government announced measures including additional investment over next four years to boost the economy as the coronavirus, or COVID19, outbreak hurt activity.

“As a result of the coronavirus, no company in Germany should go bankrupt, nor should any job be lost as much as possible,” the coalition said in a statement today. The measures were decided after talks late Sunday.

The European Union (EU) needs a “massive” economic stimulus package to fight with the negative impact of the coronavirus outbreak, French Finance Minister Bruno Le Maire said today.

Weak exports data from China and a 30 percent plunge in oil prices also dented sentiment. Oil prices crashed as much as 30 percent, raising concerns that it will have big repercussions for U.S. energy producers, which face lower prices and a potential loss of customers.

The pan European Stoxx 600 was down as much as 6.3 percent at 343.57 after falling 3.7 percent on Friday.

The German DAX slumped 6.6 percent, France’s CAC 40 index plummeted over 7 percent and the U.K.’s FTSE 100 gave up 6.3 percent.

Austrian sensor maker ams lost over 7 percent. The company said that its Chief Financial Officer Michael Wachsler will step down from his position in the Management Board of the company effective 31 May 2020.

Norsk Hydro ASA shares declined 6.4 percent. The company said that one of the four production lines at its part-owned aluminium plant Albras in Brazil has been shut down due to a fire in an electrical transformer on Friday morning local time.

Deutsche Bank shares slumped 11 percent and Commerzbank tumbled 10 percent as yields on German 10-year government bonds plunged to a historic low.

Nordex Group declined 11 percent after its 2019 results missed estimates.

BP Plc shares plunged 18 percent and Royal Dutch Shell lost more than 14 percent amid the oil price plunge.

Phoenix Group Holdings tumbled 5.4 percent and Clarkson declined 4.8 percent after reporting their earnings results for the year ended 31 December 2019.

In economic releases, German industrial production grew 3 percent on a monthly basis, reversing a 2.2 percent drop in December, data from Destatis showed. Production was forecast to grow moderately by 1.7 percent.

Another report showed that German exports remained unchanged in January, while imports recovered after falling for two straight months.

A measure of investor morale in the euro zone plummeted in March to its lowest level since April 2013.

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