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European markets posted their worst one-day drop in history

European markets posted their worst one-day drop in history today, as investors reacted to US President Donald Trump’s decision to impose restrictions on travel to the US from some countries in Europe.

The pan-European Stoxx 600 had plummeted 11% by the close, with travel and leisure stocks sinking 12.8% following Trump’s announcement of a ban on European travel.

London’s FTSE 100 lost 9.8%, the CAC in Paris shed 12.3% and Germany’s DAX fell 12.2%. Italian stocks finished nearly 17% lower.

The ISEQ Index of Irish shares closed down 10%.

US stocks suffered a historic drop on Thursday as investors dumped equities. The Dow Jones Industrial Average plummeted nearly 9%, or about 2,000 points and was on pace for its biggest one-day percentage decline since the market crash of 1987, when it collapsed by more than 22%.

It is the sixth-worst decline for the Dow in history, according to FactSet. The worst one-day drop of 2008 financial crisis did not hit this low.

The travel ban has ramped up fears the global economy will careen into recession. 

The news came after the World Health Organization officially labelled the outbreak a pandemic and hit out at “alarming levels of inaction” for its spread.

Asian equity markets, already deep in the red in reaction to the WHO announcement, also sank after Trump’s address. 

Tokyo ended down 4.4%, while Sydney lost 7.4% in the ASX 200’s worst day since the 2008 financial crisis. 

Hong Kong closed 4.4% lower, while Seoul, Singapore and Jakarta each lost more than 3%, and Mumbai tanked more than 6% and Bangkok more than 8%.

Manila crashed almost 10% after it emerged Philippines President Rodrigo Duterte would undergo a precautionary test for the virus.

The president, his finance minister and head of the central bank were among several officials who were to go into quarantine. 

The losses followed another brutal session on Wall Street last night with wave after wave of bad news, including Hilton withdrawing its earnings forecast and Boeing saying it would suspend most hiring and overtime pay. 

The Dow Jones fell into a bear market having lost more than 20% since its recent high, and futures pointed to another rout in New York and Europe. 

The coronavirus outbreak has left virtually no sector untouched, though travel and tourism have been particularly hard-hit as countries institute travel bans and quarantine requirements, with Italy in a country-wide lockdown.

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