European stocks fall on China virus concerns as world leaders gather in Davos

The pan-European Stoxx 600 dropped 1% in early trade, with basic resources falling 1.8% to lead losses as all sectors and major bourses sank into negative territory on fears over the outbreak of a new strain of pneumonia in China.

Market focus on Tuesday will likely be on the opening of the annual WEF event in Davos, where politicians and business leaders will be gathered.

Climate change and sustainable business will be a key focus for delegates at this year’s WEF summit, but other political risks such as international trade and geopolitical instability are likely to be on the agenda as well.

High-profile attendees this year include U.S. President Donald Trump, German Chancellor Angela Merkel and climate activist Greta Thunberg.

Both Trump and Thunberg, whose positions on climate change are poles apart, are expected to take to the stage at WEF on Tuesday; Thunberg will speak on a panel at 7:30 a.m. London time and Trump will deliver a keynote speech at 10:30 a.m. London time.

The event itself has been criticized for putting climate change at the top of the agenda, with environmental activists arguing that delegates arriving on private planes represent some of the worst climate offences.

Meanwhile in Asia, equities turned negative earlier Tuesday amid heightened concerns over the spread of a virus in China, that is being compared to the SARS outbreak that killed 800 people in 2002/2003. The flight from risk assets spread throughout global markets.

Stocks in Hong Kong led losses regionally among major Asian markets on Tuesday after ratings agency Moody’s cut its rating for the city to Aa3 from Aa2 on Monday.