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European Shares Fall On Covid-19 Worries

european market 021219 22jan21 lt

European stocks fell on Friday as rising Covid-19 cases as well as disappointing regional data doused hopes for a quicker economic recovery from the pandemic.

A new strain of the coronavirus has led to fresh lockdowns in many parts of the world - including countries in Asia. EU leaders are mulling internal border closures due to rising infection and death rates.

China reported 103 new infections, the country's 11th day with more than 100 confirmed cases.

On the data front, Eurozone private sector activity contracted at an accelerated pace in January amid the ongoing pandemic and related restrictions, flash data from IHS Markit showed.

The composite output index declined to 47.5 in January from 49.1 in December, signaling third successive contraction and the steepest deterioration since November.

U.K. retail sales recovered in December but the pace of growth was much slower than expected, data released by the Office for National Statistics showed.

Another report showed that the U.K. budget deficit widened to the third highest level on record in December.

The pan European Stoxx 600 dropped 0.9 percent to 407.12 after ending flat with a positive bias on Thursday. The German DAX declined 0.8 percent, France's CAC 40 index fell over 1 percent and the U.K.'s FTSE 100 was down 0.6 percent.

Travel-related stocks were losing ground, with airlines Lufthansa and Air France KLM falling 2-4 percent after the European Union proposed to label hotspots of Covid-19 infections as "dark red" zones. Holiday group TUI plunged more than 10 percent.

Total SE gave up 2 percent, BP Plc fell 2.2 percent and Royal Dutch Shell gave up 1.6 percent as oil prices slipped from the 11-month highs reached last week amid worries over the resurgence of coronavirus infections in the world's second-largest oil consumer, China.

Healthcare group Mediclinic declined 1.6 percent after the company noted continued pressure on profits in the past quarter.

Airbus shares were down 0.7 percent on news the planemaker has slowed the pace of a planned ramp-up in jetliner production.

Liquor group Remy Cointreau was moving higher after reiterating its FY guidance.

Salzgitter lost 2 percent after the steel producer reported a pre-tax result of negative 200 million euros in financial year 2020.

ProSiebenSat.1 surged 4.6 percent after its preliminary FY revenues and adjusted EBITDA exceeded expectations.

Siemens jumped 4.3 percent. The automation company said that the preliminary operating results for the first quarter of fiscal 2021 have exceeded market expectation.

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