(Reuters) - European shares fell on Thursday on worries over the economic fallout from a virus epidemic in China and some poor earnings updates, while London stocks hit session lows as the Bank of England held off cutting interest rates.
A day ahead of Britain’s exit from the European Union, the BoE left rates unchanged in Governor Mark Carney’s final policy meeting, saying it saw signs of a post-election pick-up in growth. Market participants had been almost evenly split on what the BoE’s would do.
“We continue to expect the BoE to remain dovish - but on hold - in the near-term, before turning more hawkish in mid-2020 as economic activity and inflation rebounds,” said Kallum Pickering, a senior economist at Berenberg.
The pan-European STOXX 600 ended 1% lower to take losses so far this week to 2% - its worst weekly performance in nearly four months.
Global equities and some commodities markets have experienced a sharp sell-off this week as the number of reported cases of people infected with the flu-like coronavirus jumped. It has so far claimed 170 lives in China and spread to more than 16 countries, disrupting global travel and company operations.[MKTS/GLOB]
London-listed shares of Royal Dutch Shell (RDSa.L) were the biggest drag on the benchmark index, shedding 4.4% after the company’s quarterly profit halved. The wider energy subsector .SXEP fell 2.6%, also pressured by lower oil prices. [O/R]
Shares of watchmaker Swatch Group (UHR.S) slipped 3.9% as it reported a marked drop in annual sales and forecast continuing challenges in its key Hong Kong market this year.
British cybersecurity company Avast (AVST.L) was the worst performer on the pan-regional index after it announced the closure of the scandal-hit Jumpshot analytics business, which will see it take a charge of $15-$25 million in 2020 in wind-down costs.
As the global growth outlook worsens, Germany's inflation came in below the European Central Bank's target for a ninth month in a row, strengthening the case for the bank's easing bias. Germany's DAX .GDAXI slipped 1.5%.
Reporting by Medha Singh and Susan Mathew in Bengaluru; Editing by Bernard Orr, Editing by Kirsten Donovan