Europe midday: Stocks remain under pressure as traders count costs from virus

Stocks remained under slight selling pressure come midday as traders tried to figure out whether the coronavirus was set to turn into a full-blown global epidemic or not, even as new countries announced travel restrictions.

"At present the WHO do not deem the outbreak a pandemic but looking ahead the truthful answer is we don’t currently know and lack experience with COVID-19 to make an assessment," said analysts at ShoreCap.

Overnight, some Chinese cities had imposed restrictions on travellers from Japan and South Korea, the UAE had stopped flights from Iran and the US Centers for Disease Control issued a recommendation against non-essential travel to South Korea.

On the flip-side, Jefferies chipped in saying: "Perversely, the common enemy of the 'Coronavirus' means that if needed, the global fiscal purse strings can be loosened without fear of budget deficits."

Against that backdrop, as of 1230 GMT the pan-European Stoxx 600 was down 0.47% to 409.93, alongside a 0.40% drop for the German Dax to 12,983.63, while the FTSE Mibtel was off by 0.39% at 23,336.54.

Lenders' shares were pacing losses on the Stoxx 600, with a gauge tracking the sector retreating by 1.42% anid expectations of further interest rate cuts by the European Central Bank.

According to the World Health Organisation's 35th update released overnight, the rate of new virus cases in China fell further on Monday, to 415.

However, some analysts were referencing reports citing a top Japanese expert who warned that the country, the world's fourth largest economy, could be on the cusp of a rapid increase in the number of infections.

Meanwhile, in Italy the number of cases had risen by 56 to 285 and in South Korea by 84 to 977, even as authorities in Seoul rolled-out plans for mass coronavirus testing.

The caseload in Iran had also continued growing, increasing by 34 to reach 95.

Shares of Commerzbank were at the bottom of the pile on the Stoxx 600, alongside declines in Spanish lenders Bankia and Banco Sabadell, whilst stock in ST Micro was the top gainer.

Elsewhere on the economic side of things, German gross domestic product was flat over the fourth quarter in comparison to the previous three-month stretch, as expected.

In year-on-year terms, the rate of growth in German GDP slipped from 0.6% to 0.4%, which was also as anticipated.