Global shares crashed as fears over the fallout of the spread of the coronavirus in Italy hit the shares of Ryanair and EasyJet hard, and led to a warning from retailer Penneys about potential difficulties sourcing its clothes from Chinese factories later this year.
Penneys owner ABF said supplies could be hit should the reopening of Chinese factories be delayed because the retailer sources much of its clothing lines from Asia.
Amid fears that Italy could be tipped into another recession, the shockwaves sent global shares reeling.
Worst hit were the airlines and travel firms as investors feared that fewer tourists and business people will travel in Europe.
Shares in Ryanair tanked by 13% EasyJet shares tumbled 17%, while IAG, the owner of Aer Lingus, British Airways, and Vueling, shed 9%. Shares in travel giant TUI also tumbled by 10%.
Global stock indices slumped: The Ftse 100 in London lost 247 points, or 3.3%, and the Stoxx index that tracks Europe’s largest companies fell even more, by 3.7%. Other signals of global economic stress flashed red.
The price of crude oil slid by $2.40 to $56.10 a barrel on fears over European and global economic growth, and the price of gold soared to a seven-year high of over $1,677 an ounce, as investors sought havens for their money.
The Iseq index of Irish shares suffered more than many European stock markets — dropping 4.3%.
Bank of Ireland shares declined 5% as it posted 2019 earnings and CRH, the global building products firm, shed 3.7%.
“Coronavirus concerns have hit markets hard today, with a more global reach raising fears that the virus cannot be contained as easily as many had presumed,” said Joshua Mahony, a senior market analyst at online brokers IG.
Experts had so far focused on the effects on European businesses from their disrupted supply chains with China.
Capital Economics said the weekend cases of the virus in Italy gave “another channel through which the virus could hurt the economy”, making “another recession in Italy more likely than not”.
Meanwhile, Irish citizens were advised not to travel to parts of Italy where the virus is spreading.