Worries about the economic consequences of the coronavirus epidemic hit financial markets on Monday with uncertainty among investors noticeably on the rise.
In Germany, Frankfurt’s main DAX index dropped by 3.31 per cent, while the eurozone’s blue-chip Eurostoxx 50 fell by 3.27 per cent.
The safe haven investment of gold saw its price rise to a new seven-year high on Monday, reaching 1,679 dollars per troy ounce (about 31.1 grams).
Oil prices came under pressure with the world oil benchmark Brent falling in the morning to 57.13 dollars per barrel.
The nervousness on the markets is being fuelled by the increasing international spread of the new coronavirus with fast rising infection numbers in South Korea and Italy of particular concern.
“It is clear that the economic consequences of the corona epidemic will be substantial,” DZ bank analyst Michael Bissinger said.
“Investors are for now pulling the emergency brake,” market observer Andreas Lipkow of the Comdirect Bank added.
In Germany, the shares of sectors sensitive to the economic cycle were under particular pressure on Monday.
The airline Lufthansa took a hit of more than seven per cent, while the shares of Deutsche Bank and the automotive supplier Continental fell by more than five per cent.
Investors were also pulling back from the European luxury industry, with the shares of LVMH falling by 4.2 per cent in Paris.
LVMH Moet Hennessy Louis Vuitton is the world’s leading luxury goods group.
The decline in international tourism associated with the spread of the coronavirus is mostly to blame, according to UBS bank analyst Zuzanna Pusz, as 43 per cent of the luxury sector’s sales comes from purchases by tourists.