Until recently European stock markets had broadly shrugged off the threat of coronavirus. That all changed at the start of this week when Italy announced they had identified an outbreak -- which has now spread to over 300 confirmed cases.
Which sectors are being hit hardest?
Hotel operators, cruise lines and airlines have all been hit hard, with the European travel & leisure sector now down 8% in 2020. Tourism to China has already ground to a halt, and now the same seems possible across Europe. That said, the EU currently has "no plans" to suspend the free movement of travel within the EU.
Other, non-tourist exposed sectors are being hit hard as well, such as the auto industry (-14%), because of how much they sell to China. Volkswagen Group for example sells 38% of its cars in China (2018). In a similar vein, many luxury stocks are also down double-digits, again because of their sales exposure to China, where demand is likely to evaporate for at least the foreseeable future.