Paris (AFP)

The Paris Stock Exchange ended in net decline Friday (-1.11%), the market fearing a significant economic impact of the epidemic of viral pneumonia from China while growth continues to unravel in the euro zone.

The CAC 40 index lost 65.4 points to 5,806.34 points, in a sustained trade volume of 5.65 billion euros. The day before, it had finished declining by 1.40%.

Over the past week, the index has declined 3.62%. Since the beginning of the year, its losses amount to 2.87%.

"The trend quickly deteriorated with, on the one hand, the French growth figures came out below expectations (...) and, on the other, the new worsening of the number of cases of patients infected with coronavirus who fear significant macroeconomic consequences, "Daniel Larrouturou, equity manager at Dôm Finance, told AFP.

As several Asian countries begin to close their borders to travelers from China, the Chinese ambassador to the UN in Geneva on Friday warned of "unnecessary panic" and "excessive" precautionary measures.

The epidemic of viral pneumonia, elevated to international emergency by the World Health Organization, has killed 213 people and contaminated nearly 10,000 people in mainland China to date.

Several avenues of treatment are being studied against the new coronavirus and the European Commission announced Friday a grant of 10 million euros to support research on this subject.

But "as long as the market does not anticipate that the peak of the epidemic is near, the downward trend is likely to continue," warns Mr. Larrouturou.

On the macroeconomic picture, while economic growth in the euro zone continued to slow down last year, the latest statistics from across the Atlantic show "better resistance of the American economy", underlines the expert.

Consumer confidence in the United States improved slightly in January, contradicting analysts' expectations. Year-on-year inflation accelerated in December to reach 1.6%.

In contrast, in Europe, the last quarter of 2019 shows a contraction in gross domestic product (GDP) in France (-0.1%) and Italy (-0.3%) compared to the previous quarter.

- STMicroelectronics biggest drop -

At the bottom of the CAC 40, STMicroelectronics sank 4.64% to 25.29 points. "We expect malfunctions in the microprocessor production chain, knowing that China is the most important market. And therefore, we expect supply chain jams" in related industries microprocessors, explains AFP Mr. Larrouturou.

The automotive sector was once again affected: Peugeot dropped 2.69% to 18.61 euros and Renault 0.94% to 35.24 euros. Equipment manufacturers Valeo (-1.07% at 26.92 euros) and Plastic Omnium (-2.07% at 22.70 euros) suffered the same fate.

Airbus lost 0.94% to 133.24 euros. The group has agreed to pay a fine totaling 3.6 billion euros to France, Britain and the United States to close the corruption investigations.

Maisons du monde jumped 6.76% to 12 euros thanks to 2019 sales up 10.3%, in line with expectations.

Kaufman & Broad rose 5.05% to 38.26 euros, planning to keep its 2020 revenue at the same level as in 2019.

© 2020 AFP