(Reuters) – European shares were on track for a record loss on Thursday, hitting a near seven-year low after the ECB held off on a rate cut, further upsetting markets reeling from U.S. travel restrictions to halt the fast-spreading coronavirus.

The ECB approved additional asset purchases and temporarily dropped banks’ capital requirements to help the euro zone cope with the shock of the coronavirus pandemic.

However, the central bank kept interest rates on hold, contrary to what markets had been pricing in.

This exacerbated tensions over the economic shock from U.S. President Donald Trump curbing travel from Europe to the United States for 30 days.

The benchmark STOXX 600 index fell around 10%, extending declines to a sixth straight day with all but one constituent trading in the red as the World Health Organisation for the first time referred to the coronavirus outbreak as a pandemic.

“The market’s really disappointed that the ECB did not cut rates. The additional quantitative easing wasn’t enough to get the market excited,” said Donald Calcagni, chief investment officer at wealth manager Mercer Advisors.

Travel and leisure stocks .SXTP shed 12.5%, underperforming their peers as airlines Air France KLM (AIRF.PA), Lufthansa (LHAG.DE) and British Airways-owner IAG (ICAG.L) plummeted in wake of the travel restriction.

The sector has now lost over a quarter of its value this month as a virtual halt to business travel and holiday cancellations force airlines to cut back on flights.

Joining a growing list of corporate casualties of the outbreak, WH Smith (SMWH.L) forecast a 40 million pound ($51.25 million) hit to annual profit, while airport retailer Dufry (DUFN.S) said it would cut jobs after posting a 7.3% slump in organic sales.

Their shares plunged 21.5% and 28.3%, respectively.

Cinema operator Cineworld (CINE.L), sank 20% after it said that a worst case scenario for the virus outbreak could cast doubt on its ability to continue as a going concern.

“It’s very hard to provide a circuit breaker now, from the outside. For the moment we have to consider and we have to admit that we’re staying in this rather turbulent market environment,” said Philipp Brugger, head of investment strategy at Union Investment.

Norwegian oil equipment provider TGS NOPEC Geophysical Co (TGS.OL) was the sole gainer on the STOXX 600, rising about 1.6%.

Source: Read Full Article