February 26, 2020 / 9:52 AM / a month ago

Coronavirus fears shove Italian, German stocks into correction

LONDON, Feb 26 (Reuters) - Italian and German blue-chips officially entered correction territory on Wednesday morning as a sudden jump in coronavirus cases in Italy and in other European countries raised worries about a prolonged economic slowdown.

Investors typically consider a correction in a security or index to be a drop of 10% or more from its recent peak.

Italy’s FTSE MIB has fallen nearly 11% in the last five sessions in a cliff-edge drop from the October 2008 high it hit on February 19. Germany’s DAX also briefly dropped 10% from the same date.

“Equities are coming back to earth fast,” Barclays European equity strategist Emmanuel Cau said in a note.

“The global virus outbreak adds material downside risks to the macro outlook and could thus continue to fuel the flight to safety”. (Reporting by Thyagaraju Adinarayan, editing by Julien Ponthus)

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