European Shares Seen Lower As Virus Restrictions Return

stockmarkets jan23 29jun20 lt

European stocks are seen opening lower on Monday after two of the largest U.S. states reversed course and reinstated some coronavirus restrictions amid a surge in new infections.

U.S. Health and Human Services Secretary Alex Azar warned Sunday that the "window is closing" for the United States to get the coronavirus pandemic under control.

New outbreaks are reported in countries including China, New Zealand and Australia, prompting governments to impose restrictions again.

Global coronavirus cases exceeded 10 million on Sunday, while the worldwide tally of virus-linked deaths reached 499,124, according to a running tally by U.S.-based Johns Hopkins University.

The U.S. is the worst-hit country with over 2.5 million infections, while its death toll exceeds 125,500.

Brazil, Russia, India, Italy, Spain and the U.K. are the other hardest-hit countries in the world.

Asian markets retreated as a staggering rise in virus cases was reported in 36 U.S. states, including Florida, which some experts have cautioned could be the next epicenter for infections.

Investors are also reacting to mixed regional data. While profits at China's industrial firms rose for the first time in six months in May, retail sales in Japan tumbled at a double-digit pace in the month, separate reports showed.

China's central bank on Sunday vowed stronger macro-economic policy adjustment as well as better fiscal, monetary and employment policy coordination and implementation after pumping cash into the banking system via reverse repos to maintain liquidity.

A firm dollar kept riskier currencies under pressure, while gold futures edged closer toward $1,800 an ounce -- a level last seen at the end of 2011. Oil prices fell for a second straight session on concerns over energy demand outlook.

Economic confidence numbers from euro area and flash inflation data from Germany are due later in the session, headlining a busy day for the European economic news.

U.S. stocks tumbled on Friday as several U.S. states imposed business restrictions after a resurgence in new infections and the Wall Street Journal reported that the Phase 1 U.S.-China trade deal could be at risk.

Banks paced the declines as the Federal Reserve moved to cap bank dividend payments and halt stock buybacks.

The Dow Jones Industrial Average plunged 2.8 percent to register its steepest fall in two weeks, while the tech-heavy Nasdaq Composite index slumped 2.6 percent and the S&P 500 lost 2.4 percent.

European stocks ended Friday's session mostly lower amid rising worries about sharp spikes in new coronavirus cases in the U.S.

The pan European Stoxx 600 eased 0.4 percent. The German DAX shed 0.7 percent and France's CAC 40 index slid 0.2 percent while the U.K.'s FTSE 100 edged up 0.2 percent.

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