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European stocks close 11% lower in worst one-day drop ever on coronavirus fears

European markets posted their worst one-day drop in history on Thursday, as investors reacted to President Donald Trump’s decision to impose restrictions on travel to the U.S. from some countries in Europe, and the European Central Bank’s decision not to cut interest rates.

The pan-European Stoxx 600 had plummeted 11% by the close, with travel and leisure stocks sinking 12.8% following Trump’s announcement of a ban on European travel. The U.K.’s FTSE 100 lost 9.8%, France’s CAC 40 shed 12.3% and Germany’s DAX fell 12.2%. Italian stocks finished nearly 17% lower, which was also the worst single-day loss for the FTSE MIB.

Trump said Wednesday that the U.S. will suspend all travel from Europe to the U.S. for 30 days to curb the spread of coronavirus. The new rules will go into effect on Friday night. The measures will affect 26 European countries that are part of the visa-free Schengen area. The U.K. and Ireland are exempted from the restrictions, as are American citizens who have undergone virus screening.

The European Central Bank decided Thursday not to cut interest rates, despite market expectations for a reduction amid the ongoing coronavirus outbreak, which disappointed markets and deepened the session’s already significant losses. Analysts had expected a 10 basis point cut. The central bank did announce measures to support bank lending, and expanded its quantitative easing (QE) program by 120 billion euros ($135.28 billion).

The World Health Organization (WHO) declared the coronavirus outbreak a pandemic on Wednesday. There are at least 120,000 confirmed cases of the virus worldwide and at least 4,717 people have died worldwide.

European stocks close 11% lower in worst one-day drop ever on coronavirus fears, CNBC, Mar 12

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