The Stoxx 600 shed nearly 3 per cent on Monday as outbreak fears gripped markets. The virus has claimed 133 lives so far and infected more than 5,000 people in China, prompting a Chinese government economist to warn that the country's economic growth may drop to 5 per cent or even lower.
"You've got the tension between what investors would like to do - keep pouring into equities, there is a great appetite to keep pushing these indices higher - but there keeps being these big global problems that keep forcing investors to have to question and justify a rebound when there is no reason to do so," said Connor Campbell, analyst at British financial spread better Spreadex.
German shares lagged regional peers, closing up 0.2 per cent after dipping into the red during the session. China is Germany's most important trading partner. Germany's economy minister raised the economic growth outlook for the country but cut expectations for 2021.LVMH, Louis Vuitton owner, was one of the biggest drags on the Stoxx 600 as slowing sales growth in the fourth quarter dented shares. Luxury stocks, which derive a chunk of their demand from China, had attempted a recovery on Tuesday.
Investor attention now turns to central bank meetings from around the world. The US Federal Reserve is almost certain to keep interest rates on hold at the end of a two-day policy meeting later in the day, while expectations of a rate cut by the Bank of England on Thursday stand at 50 per cent.
Singapore Latest News, Singapore Headlines
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