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European Markets Close Notably Lower On Virus Fears, Growth Worries

European stocks ended notably lower on Monday as worries about continued spikes in coronavirus cases across Europe and the U.S. and tougher lockdown restrictions in several countries, including the U.K., France, Germany and Spain, raised concerns about economic recovery.

Data showing weakening consumer sentiment in Germany hurt. Fading hopes about a U.S. fiscal stimulus before the upcoming presidential election weighed as well.

The pan European Stoxx 600 lost 1.81%. The U.K.'s FTSE 100 declined 1.17%, Germany's DAX tumbled 3.7% and France's CAC 40 fell 1.9%, Switzerland's SMI ended lower by 0.38%.

Most of the other markets across Europe also ended weak with their benchmark indices posting sharp to moderate losses.

In the UK market, IAG slid 7.6% and Rolls-Royce Holdings declined 7.2%. Sage Group shares ended more than 6% down, while Whitbread shed about 6%.

Burberry Group, Compass Group, Intercontinental Hotels, Melrose, Standard Life, Persimmon, Royal Dutch Shell, BP and Barratt Developments lost 2.5 to 5%.

On the other hand, Pearson moved up nearly 3%, while AstraZeneca, BT Group and Avast gained 1.2 to 1.7%.

In France, Technip ended more than 7% down. Cap Gemini, WorldLine, Accor, Saint Gobain, Safran, Sodexo, Schenider Electric, Airbus, Bouygues, STMicroElectronics and Engie lost 2 to 6%.

In the German market, SAP plunged more than 20% after the software company cut its revenue forecast for 2020, saying that its business would take longer than expected to recover from the coronavirus pandemic.

Thyssenkrupp declined more than 5%, while Lufthansa and MTU Aero Engines lost about 4.5% each. Linde, Covestro, HeidelbergCement, Adidas, Volkswagen, Deutsche Post, BASF and Siemens also ended sharply lower.

Bayer AG shares saw some buying after the pharmaceutical and life sciences company announced the acquisition of Asklepios BioPharmaceutical, Inc. or AskBio, a U.S.-based biopharmaceutical company.

In economic releases, German business sentiment weakened in October, survey data from ifo Institute showed today. The business climate index fell to 92.7 in October from revised 93.2 in September.

The reading was below economists' forecast of 93.0. Assessment of current situation improved, while expectations deteriorated in the month.

The current conditions indicator rose to 90.3 from 89.2 a month ago. The expected level was 89.8.

The expectations indicator came in at 95.0. The score was forecast to fall to 96.5 from September's initially estimated 97.7.

According to ifo survey, sectors such as the hospitality industry in particular are likely to be affected by the recent sharp rise in the number of infections and the containment measures that have therefore been expanded in some regions.

According to Bundesbank's monthly report, the German economic recovery is likely to continue in the current quarter, albeit at a much slower pace.

The central bank said economic output is likely to have risen sharply in the third quarter.

Gross domestic product could have made up for a little more than half of the drastic slump in the first half of the year, Bundesbank observed. Nevertheless, around 5% are still missing compared to the pre-crisis level from the last quarter of 2019.

Spain's producer prices fell 3.3% year-on-year in September, slower than the 3.5% decrease seen in August, data from the statistical office INE showed. On a monthly basis, producer prices grew 0.3%, reversing a 0.2% drop in the previous month.

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