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* Resource stocks hit by ex-div trading
* More companies warn of pain from coronavirus
* 10 bps cut by ECB does little to economy - analyst
* HSBC down after coronavirus case in London
(Updates to close)
By Ambar Warrick and Sruthi Shankar
March 5 (Reuters) - European shares snapped a three-day
gaining streak on Thursday as concerns over the scale of
economic damage caused by the coronavirus outbreak overtook
optimism over support from monetary stimulus.
Resources was the worst performing sector as several
heavyweight miners, including BHP Group and Rio Tinto
, traded ex-dividend. The two stocks lost about 6% and 7%
for the day, respectively.
The main European equity benchmark ended 1.4% lower
after the death toll from the outbreak rose to more than 3,300,
with several more companies providing profit warnings because of
disruptions caused by the coronavirus.
Hopes of stimulus from several major central banks to stymie
the impact of the outbreak had stabilised the index this week,
but questions had remained about whether central banks would be
able to completely shelter big economies.
Analysts firmly expect the European Central Bank to cut
interest rates by 10 basis points next week.
"At 10 basis points, an interest rate cut hardly does
anything to the economy. It's more of a signal to the market
that the ECB is ready to act and also, it will likely be
accompanied by a message that they're looking into more targeted
measures," said Elwin de Groot, head of Macro Strategy at
Rabobank in Amsterdam.
Travel and leisure stocks dropped 2.9%, with the
sector ranking among the worst hit by the virus.
Airline stocks plunged after British regional airline Flybe
collapsed, making the struggling carrier the industry's first
big casualty of the outbreak.
British commercial broadcaster ITV fell 12% after
warning that ad revenue for April could fall by about 10% as
travel companies put back campaigns.
German auto supplier Continental slumped 12.4%
after it posted a net loss of 1.2 billion euros ($1.34 billion)
in 2019, with the broader automakers index dropping 3.4%
in tow.
Heavyweight bank HSBC dropped 1.2% after it sent
more than 100 of its London staff home after a worker tested
positive for the coronavirus.
Broader bank stocks retreated in the face of
steadily dropping bond yields
Ratings agency Fitch said on Thursday the spread of the
coronavirus in the EU opens new channels for it to affect the
regional economy and heightens its adverse impact on GDP growth.
Rabobank's Elwin said the EU would probably have two
quarters of zero-to-negative growth, with some countries showing
negative growth in 2020.
Among stocks in the black was German food delivery firm
Hellofresh, which was one of the top gainers on the
STOXX 600 after JP Morgan upgraded the stock.
(Reporting by Sruthi Shankar in Bengaluru; editing by Patrick
Graham, Bernard Orr and Timothy Heritage)
