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European markets plunged Thursday morning as investors reacted to President Donald Trump’s decision to impose restrictions on travel to the U.S. from some countries in Europe.
The pan-European Stoxx 600 dropped 5.5% in early trade, with travel and leisure stocks plummeting 9.3% following Trump’s announcement of a ban on European travel.
Trump said Wednesday that the U.S. will suspend all travel from Europe to the U.S. for 30 days to curb the spread of coronavirus. The new rules will go into effect on Friday night. The measures will affect 26 European countries that are part of the visa-free Schengen area. The U.K. and Ireland are exempted from the restrictions, as are American citizens who have undergone virus screening.
“These restrictions will be adjusted subject to conditions on the ground,” Trump said, blaming Europe for not taking adequate action to control the spread of the virus; Italy is the worst hit country outside China and a nationwide lockdown continues there.
The World Health Organization (WHO) declared the coronavirus outbreak a pandemic on Wednesday. There are at least 118,381 confirmed cases of the virus worldwide, according to the latest figures from the WHO. At least 4,292 people have died worldwide, the WHO said.
On Thursday, investors are awaiting the latest monetary policy decision from the European Central Bank which is expected to announce stimulus measures to mitigate the economic impact of the coronavirus.