The outbreak of a coronavirus in China provided the trigger for investors to lock in recent gains. The Yuan weakened, industrial commodities eased and shares fell globally as news that the virus has landed in countries as far away as the US and Australia provoked caution. German investors shrugged off the potential risk, driving the DAX index to an all-time high, after a read on consumer expectations exceeded all expectations.

Investors scrambled as reports of increasing numbers of infected patients hit headlines. The swift and transparent response from authorities will most likely prevent an epidemic, but investors fear the coming lunar New Year and associated travel could breach the containment strategies. The recent global strength of equities made markets particularly vulnerable to downside catalysts.

The ZEW survey of German consumer expectations in January came in at 26.7, well above forecasts and the previous reading at 10.7. Commentators attributed the better outlook to recent trade deals. In contrast, the French CAC and UK FTSE indices fell by around 0.5%.

US indices also fell as corporate reporting remained mixed. Netflix earnings and revenue beat forecasts but the stock fell on cautious statements from management around future subscriber growth. IBM shares lifted after the company snapped a five consecutive quarterly decline in revenue.