European markets focus on coronavirus

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European markets are expected to open higher Tuesday with the fast-spreading coronavirus putting the continent in shutdown mode and fueling fears of an impending recession.

London’s FTSE is seen opening 132 points higher at 5,220, Germany’s DAX is seen 90 points higher at 8,815 and France’s CAC is seen 57 points higher at 3,881 while Italy’s FTSE MIB is expected to open up 170 points at 15,214, according to IG.

Europe’s lockdown over the coronavirus continues to dominate headlines. Italy and Spain remain the worst hit countries but France and Germany have also reported sharp rises in cases. The French president announced that the European Union would be closing its external borders on Tuesday.

Emmanuel Macron also said he was ordering people in France to stay at home for up to 15 days because of the coronavirus outbreak.

In the U.K., the government stopped short of closing schools but stepped up its advice to the public, with U.K. Prime Minister Boris Johnson telling the country on Monday to avoid social contact.

“Now is the time for everyone to stop non-essential contact with others and to stop all unnecessary travel,” Johnson said at a press conference. “You should avoid pubs, clubs, theaters and other such social venues,” he added.

In the U.S. on Monday, President Donald said the country could be heading for a recession due to the coronavirus outbreak. The Dow Jones Industrial Average suffered its worst day since the “Black Monday” market crash in 1987 Monday and its third-worst day ever. This was despite the Federal Reserve embarking on a massive monetary stimulus campaign to curb slower economic growth amid the coronavirus outbreak. 

Stocks in Asia Pacific were mostly higher Tuesday trade as they seesawed in reaction to Wall Street’s plunge and the Philippines shut its markets temporarily.

VW releases full year results Tuesday and Germany’s ZEW survey of economic sentiment is published.

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