European equities enter bear market zone as oil prices collapse

Created : 2020-03-09 , at 16:09 Ofeed Team 204

European equities fell in Monday’s trading, after a possible oil price war between Saudi Arabia and Russia hit global markets, raising fears that the global economy is sliding into recession on the back of the coronavirus epidemic.

As of 11:35 GMT, the Euro STOXX 600 fell 6.54 percent to 343.02, after touching the lowest level since January 2019 at 341.42. That forced European stocks to enter a bear market, which means falling 20 percent

In Italy, FTSE MIB index slumped 10.18 percent at 18,686.10, recording the lowest level since January 2019, and marking the largest decline among in European shares at press time.

The Italian index was affected by the rise in the number of cases of Mers-CoV to 7,375, bringing the number of cases to 25 percent up from yesterday.

Italy ranks second in terms of death toll after China. Italian authorities have imposed a quarantine on millions of people in northern Italy in the latest step to contain the country's new coronavirus, which will impose strict restrictions on entry and exit to a large area in northern Italy.

France CAC 40 was 6.53 percent down to 4,806.77. In Germany, DAX descended 6.57 percent to 10,783.70 points. Britain’s FTSE 100 slipped 6.48 percent to 6,043.51.

The sharp fall in European shares come as a result of last Friday's meeting between OPEC and non-OPEC producers, most notably Russia, in reaching an agreement on deepening the current supply cut agreement, which will last until the end of the month.

In addition to fears associated to the rapid spread of Coronavirus, as the number of people living with the Chinese virus has risen to more than 110,000 worldwide, with the fact that its spread extends to more countries and causes further economic damage.

Investors' reluctance to take risk comes as concerns grow that the coronavirus outbreak could have severe negative repercussions on the global economy.

Meanwhile, the dollar index, which measures the performance of six major currencies against the U.S dollar, traded at 95.05 after slumping to its lowest level since January 2019 at 94.65.