European shares were particularly hard-hit overnight, falling 2 per cent after China extended travel bans and the Lunar New Year holiday in an effort to help contain the spread of the coronavirus.
The biggest jolt was felt by luxury, airlines and hotel issues, which see big demand from Chinese consumers. Europe’s major luxury players have lost more than $US50 billion in market value since the outbreak last week.
Led by a steep sell-off in luxury retailers, France’s CAC lagged all regional bourses falling 2.2 per cent. LVMH , Christian Dior, Hermes and Gucci owner Kering, which are heavily reliant on Chinese demand, fell more than 3 per cent.
Other companies in the luxury space such as Burberry Group, Moncler, Swiss watchmakers Swatch and Richemont declined between 2.7 per cent and 4.6 per cent while airport retailer Dufrywas set for its steepest one-day drop in more than a year.
With rising travel curbs, flight operators Air France, Lufthansa and British Airways-owner IAG, cruise line operator Carnival Corp, hotel group Accor and IHG took a hit, pushing Europe’s travel and leisure index to a near seven-week low.
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