European stock markets fall for worse prospects and weighed down by banks



Doubts about the impact of the coronavirus on the global economy have returned to the stock markets after three days of relative calm, which has resulted in widespread declines in European stock exchanges, which are close to 2%.

Markets are penalized for the worsening of macroeconomic forecasts and the negative cash that eventual generalized cuts in interest rates - already applied by the United States, Australia and Canada - could have in banks, which are listed today in red.

The European stock exchanges, which had opened in green driven by the sharp rise in Wall Street yesterday (4.53%), have quickly turned around and now record losses.

The Ibex 35, the selective of the Spanish Stock Exchange, fell 2.2% at 1:45 p.m., while London left 1.7%; Frankfurt, 1.5%; Paris, 1.6%; and Milan, 1.8%.

Today's session highlights the falls of airlines and banks, in the first case because of the impact of the coronavirus on transport and in the second because of the worse macroeconomic outlook and the drop in interest rates, which reduce the margins of financial institutions.

At 13:45, the IAG group, of which Iberia, Vueling and British Airways are part, fell 4%; the French Air France-KLM, almost 9%; and the German Lufthansa, 4.5%.

According to the International Air Transport Association (IATA), the expansion of the coronavirus will cut revenues from the sector between 63,000 and 113,000 million dollars (56,405 million euros and 101,196 million euros).

In February, IATA had calculated a negative impact of 29,000 million dollars (25,963 million euros), a figure that has been revised upwards as the epidemic spreads.

In the financial sector, Santander falls 4.1%; CaixaBanka, 4%; and BBVA, 3.7%; while Unicredit loses 4.8%; Mediobanca, 4.5%; Société Générale, 4.4%; and Natixis, 4.7%.

Asset manager Schroders today has lowered its forecast of growth in the global economy for this year, from 2.6% to 2.3%.

In addition, the rating agency Scope Ratings believes that the Italian economy could contract 0.3% in 2020.

In his opinion, the resources of the Government of Rome to cope with the impact of the coronavirus without jeopardizing the sustainability of public debt are limited.

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