AFLYY Air France ADS (PK)

By Chitra Somayaji 

Shares of European airlines plunged Monday, led by easyJet PLC and Ryanair Holdings PLC, on speculation that authorities may crack down on flights and travel in the region after the biggest outbreak of coronavirus outside Asia emerged in Italy.

EasyJet shares plummeted over 16%, their biggest drop since the U.K. voted to leave the European Union in June 2016. The drop made the U.K. airline the worst performer in the pan-continental Stoxx Europe 600 index. Ryanair dropped 13.4%, while Air France-KLM SA tumbled 10.5% and TUI AG dropped 10.8%.

The declines came amid a broader selloff in global markets, with oil prices and stocks around the world retreating sharply as new pockets of the coronavirus infection came to light in South Korea, Italy and Iran. That has sharpened anxieties about the global economic impact of the outbreak, which already shows signs of curtailing manufacturing and consumption in China, the world's second-biggest economy.

Roughly 200 people have been infected by the virus in Italy, which reported a sixth death from the pathogen on Monday, in a crisis that is likely to test Europe's open borders and easy travel in coming weeks. Authorities imposed quarantines and other restrictions in Italy's economic heartland, and officials in other regions are banning or restricting activities in an attempt to limit new infections.

"Italy's lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected," analysts at AJ Bell said in a note. The drop in travel stocks suggests that "investors are fearful that consumers and business people may lose their appetite to travel."

(END) Dow Jones Newswires

February 24, 2020 09:32 ET (14:32 GMT)

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