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European Stocks Close Lower On Virus Jitters

European stocks closed lower on Friday as worries about rising coronavirus cases and fresh lockdown measures in several countries in Europe raised concerns about growth and rendered the mood bearish.

Concerns about rising inflation and likelihood of several central banks hiking interest rates in the foreseeable future contributed as well to the weakness in the markets.

The pan European Stoxx 600 ended 0.33% down. The U.K.'s FTSE 100 drifted down 0.45%, Germany's DAX slid 0.38% and France's CAC 40 shed 0.42%, while Switzerland's SMI edged down 0.07%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Poland, Portugal, Russia and Spain ended with sharp to moderate losses.

Norway closed higher, while Sweden and Turkey settled flat.

Bank stocks declined after European Central Bank President Christine Lagarde said today that inflation in the euro zone will fade over the medium term and it doesn't make sense to react by tightening policy.

Speaking at the 31st Frankfurt European Banking Congress 2021, Lagarde said the bank must not rush into a premature tightening when faced with passing or supply-driven inflation shocks. She said tightening policy prematurely would only make the squeeze on household incomes worse.

In the UK market, Kingfisher declined more than 4% amid concerns over a lack of visibility on the outlook for the 2022-23 year.

Compass Group, Melrose Industries, Rolls-Royce Holdings, IAG, BT Group, Royal Dutch Shell and ITV shed 3 to 5.2%.

BP, M&G, Whitbread, Barclays Group, Associated British Foods, Standard Chartered, Coca-Cola, Aviva, Informa, ABRDN and Lloyds Banking Group ended lower by 1.6 to 3%.

Ocado Group climbed nearly 7%. Royal Mail surged up 3.7% and RightMove gained nearly 3%. Segro, Reckitt Benckiser, Auto Trader Group, B&M European Value Retail, Rio Tinto and Croda International also posted strong gains.

In the French market, Technip, Faurecia, Sodexo, Renault, Unibail Rodamco, Accor and BNP Paribas declined 3 to 4.5%.

Veolia, Vinci, ArcelorMittal, Societe Generale, Safran, Michelin, Credit Agricole and Bouygues lost 1 to 3%.

Hermes International gained more than 5% to a record high after reports that it may be added to the Eurostoxx 50 index during a December review.

Teleperformance advanced 2.3%, while Dassault Systemes, Schneider Electric, Air Liquide and STMicroElectronics gained 0.8 to 1.4%.

In Germany, Deutsche Bank declined nearly 5%. Airbus and MTU Aero Engines both shed more than 3%. Volkswagen, Bayer, Covestro, Porsche Automobil, RWE, Fresenius and BASF lost 1.6 to 2.5%.

Zalando, HelloFresh, Sartorius, Deutsche Post and Vonocia gained 1.8 to 4%.

In economic releases, U.K. retail sales advanced 0.8% month-on-month in October, after staying flat in September, data from the Office for National Statistics showed. Economists had forecast a monthly growth of 0.5%. This was the first increase since May.

Separate data showed that U.K. budget deficit exceeded expectations and also marked the second-highest October borrowing since monthly records began in 1993.

German producer prices increased 18.4% year-on-year in October, following a 14.2% rise in September, data released by Destatis revealed. Prices were expected to gain 16.2%. This was the highest growth since November 1951, when prices surged 20.6%.

France's unemployment rate rose marginally in the third quarter, climbing to 8.1% from 8% in the second quarter, data from the statistical office Insee showed.

The statistical office said the rate has been broadly stable between 8% and 8.1% since the fourth quarter of 2020, similar to its end of 2019 level, before the health crisis.

The euro area current account surplus increased to EUR 19 billion in September, up from EUR 17 billion in the previous month, data from the European Central Bank showed.

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