Europe open: Stocks extend falls as CDC and WHO issue warnings

Stocks on the Continent were again in the red in the middle of the week after the US Centres for Disease Control told Americans that an outbreak in the country was only a matter of time and the World Health Organisation urged countries to make preparations now.

Overnight, Dr. Bruce Aylward, the head of a joint WHO-Chinese mission, said: "Think the virus is going to show up tomorrow. If you don’t think that way, you’re not going to be ready."

Against that backdrop, as of 1030 GMT the benchmark pan-European Stoxx 600 was down by 1.49% at 398.57, alongside a 1.69% drop for the German Dax to 12,574.95 while the Cac-40 was 1.24% lower to 5,609.37.

Stocks on the periphery were faring better, with Italy's FTSE Mibtel dipping just 0.17% to 23,051.12, while the Spanish Ibex 35 was down by 0.89% to 9,182.4.

The warning from the CDC in Atlanta sent shares on Wall Street sharply lower again on Tuesday with yields on 10-year US Treasuries pushed to a record low - even if only by a little - as investors stampeded into the relative safety of government bonds.

Commenting on the correction in stockmarkets around the world, IG chief market analyst, Chris Beauchamp, said: "Of course, the selling is not confined to London, and if anything Europe is more heavily affected this morning, since the greater number of new cases has been seen on the continent.

"Against such a backdrop, 2019's concerns about Brexit and trade wars fade into insignificance. The economic impact clearly cannot be contained now to China alone, and both monetary and fiscal stimulus will be needed to help economies recover from this."

Also overnight, China's National Health Commission said that the number of new infections in the country had fallen further, from 508 on Tuesday to 406.

In South Korea meanwhile, the caseload increased by 169 to reach 1,146 and in Italy there were now 320 cases, up from 283 in the day before.

According to analysts at ShoreCap, whether or not the COVID-19 coronavirus became a full-fledged pandemic would hinge on the virus's behaviour in new countries and the kind of containment measures those countries adopted.