Europe Markets

European stocks close lower as coronavirus spread curbs sentiment; Pearson down 4.5%

Key Points
  • The spread of a new strain of coronavirus was the main focus for investors, as the number of cases and deaths increased.
  • Euro zone composite flash PMI came in at 51.6 in February, beating forecasts, while manufacturing jumped to 49.1, hitting a 12-month high.

European stocks closed lower on Friday afternoon, as investors monitored a raft of economic data and the latest developments in the coronavirus outbreak.

The pan-European Stoxx 600 fluctuated for much of the day but closed 0.6% lower, taking cues from poor sentiment over on Wall Street.

The spread of a new strain of coronavirus was the main focus for investors, as the number of cases and deaths grew. China's National Health Commission said another 889 cases had been confirmed in the mainland, while the death toll rose by 118 to 2,236. China's commerce ministry said it expected the growth rate of January/February imports and exports to fall sharply due to blockages in logistics, delays in the resumption of work and other factors such as the Lunar New Year.

In the U.S., stocks fell sharply on the new coronavirus cases, which fueled worries over a pronounced global economic slowdown.

On the data front, business activity in the euro zone expanded more than expected this month, according to the latest figures. Euro zone composite flash PMI came in at 51.6 in February, up from 51.3 in January and beating forecasts, while manufacturing jumped to 49.1 from 47.9 in January, hitting a 12-month high and significantly exceeding analyst expectations of 47.5. For PMI data, 50 is the level that distinguishes expansion from contraction.

U.K. businesses maintained solid growth in February as factories posted the biggest output rise for 10 months, so far unfazed by the supply chain disruption stemming from Chinese industrial shutdowns. U.K. composite PMI came in at 53.3 in February, beating the Reuters consensus forecast of 52.8.

As for corporate news, Allianz reported an increase in net profit of 9.5% to 1.858 billion euros ($2.01 billion) — a better-than-expected fourth-quarter result for the German insurer. Its stock closed around 1% higher.

Pearson reported a 6% growth in operating profit to £581 million ($748.7 million) for 2019, slightly below its revised guidance, on the back of falling textbook sales in North America. The British education publisher's shares dropped 4.8%.

Biggest movers

Moneysupermarket shares fell 4.5%, close to the bottom of the European benchmark as investors seemingly cashed in on Thursday's price leap, while Proximus shed 5.7% after fourth-quarter results.

At the top of the Stoxx 600, Sopra Steria surged 11% after announcing the acquisition of Sodifrance.