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* Fed's emergency rate cut rattles global markets
* French, Spanish markets lead declines
* Travel and leisure stocks plunge as pandemic halts travel
* Credit Suisse hits record low on report of U.S. probe
(Adds comments, updates to close)
By Shreyashi Sanyal and Sagarika Jaisinghani
March 16 (Reuters) - European shares plummeted to 2012 lows
on Monday as the coronavirus pandemic raged through Europe, with
dramatic monetary easing by global central banks failing to
reassure investors about its growing economic damage.
The pan-European STOXX 600 fell 4.9%, with markets
in France and Spain leading losses as the two
countries joined Italy in enforcing a national lockdown.
Airlines and holiday operators including TUI,
EasyJet, British-Airways owner IAG and Air
France - KLM were among the biggest decliners on the
STOXX 600 as the pandemic brought global travel to a standstill.
The wider travel and leisure index plunged more than
10%. The Euro STOXX 50 volatility index, popularly termed the
European "fear gauge" jumped to a record high of 95.02.
"The already-struggling restaurants and companies operating
in tourism, hotel and leisure will lay off people, who they
might hire back later, but initially there will be an increase
in unemployment, and that means a further shock to the minds of
investors," said Andrea Cicione, head of strategy at TS Lombard
in London.
The U.S. Federal Reserve cut interest rates to near zero in
its second emergency move in two weeks and pledged hundreds of
billions of dollars in asset purchases, saying the epidemic was
having a "profound" impact on the economy.
"That pretty much surprised everybody, at least with the
timing of their announcement. It was a large cut. On top of
that, in terms of purchases, they said they're going to go in
quite big from the beginning," TS Lombard's Cicione said.
Central banks in Japan, Australia and New Zealand followed
with their own measures but could not stem a slide in global
stocks.
Wall Street fell more than 8% at opening on Monday and
triggered an automatic 15-minute halt of its three main indexes
for the third time in six days.
The benchmark European index has now lost more than a third
of its value since hitting a record high in mid-February, with
declines made worse by a crash in oil prices and the European
Central Bank's decision to hold interest rates last week.
The latest economic data from China showed factory
production plunging at its fastest pace in 30 years. That
re-ignited fears of a global recession as the pandemic paralyses
supply chains and crushes business sentiment.
French banks Natixis and SocGen gave up
11.8% and 15.3%, respectively, dragging the wider market
down 5.8% to its lowest level since June 2013.
Spain's IBEX slumped almost 8% to its lowest in
nearly two decades, with financials Santander, BBVA
, Caixabank SA and Banco de Sabadell SA
shedding 10.6% to 13%.
Europe's banking index fell 8.4% to a record low.
Credit Suisse plummeted 9.4% to an all-time low
after a report that U.S. prosecutors were investigating the
bank's role in a $2 billion Mozambique corruption case.
(Reporting by Shreyashi Sanyal and Sagarika Jaisinghani in
Bengaluru; Editing by Kevin Liffey)
