November 29, 2020

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European Markets Close Lower On Growth Worries

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European markets ended mostly lower on Thursday as stocks retreated from multi-month highs amid uncertainty about a quicker economic recovery due to the continued surge in coronavirus cases across the continent and in several states in the U.S.

Markets had moved up sharply in earlier sessions this week following an announcement from Pfizer and BioNTeck that the phase three clinical trials of their coronavirus vaccine showed the medicine to be more than 90% effective.

However, with several countries have reported spikes in new coronavirus cases, there are concerns about logistical challenges in distributing vaccines.

France is now the worst coronavirus affected country in Europe, overtaking Russia while the U.K. became the first country in Europe to register over 50,000 coronavirus-related deaths.

The pan European Stoxx 600 declined 0.88%. The U.K.’s FTSE 100 ended down 0.68%, while Germany’s DAX and France’s CAC 40 slid 1.24% and 1.52%, respectively. Switzerland’s SMI ended weak as well, albeit with a less pronounced loss of 0.34%.

Among other markets in Europe, Austria, Belgium, Finland, Greece, Iceland, Ireland, Poland, Spain, Sweden and Turkey closed weak.

Czech Republic, Denmark, Portugal and Russia ended higher, while Netherlands and Norway closed little changed.

In the UK market, Rolls-Royce Holdings tumbled more than 8.5%. HSBC Holdings, Sainsbury, St. James Place, Croda International, Standard Chartered, IAG, Barclays Group, M&G and BP lost 2 to 4%.

Shares of luxury brand Burberry fell more than 2%. The group said its sales returned to growth in October as comparable store sales fell by less than expected in the previous quarter.

On the other hand, Fresnillo surged up 3.75%. 3i Group rose 2.5% on strong first-half earnings. DCC, Flutter Entertainment, Experian, Polymetal International, Rentokil, Bunzl, Hikma, Coca-Cola and BT gained 1 to 2.5%.

In the German market, Siemens slid more than 3% despite reporting a 28% rise in net profit in the most recent quarter. The company said it expects “a moderate increase” in net profit for the group in its 2021 fiscal year.

E.ON, Munich RE, Linde, Allianz, Fresenius and RWE lost 1 to 2%. BMW, Volkswagen and Daimler also closed weak, while Wirecard and Merck closed notably higher. Deutsche Telekom closed modestly up after results beat expectations.

In France, BNP Paribas, Valeo, Credit Agricole, Safran, Societe Generale, Airbus, Veolia, Peugeot, Sanofi, Technip and LVMH lost 2 to 5%.

Accor surged up more than 3%, while Orange gained nearly 2%. Renault ended modestly higher.

In economic releases, official data showed that German consumer prices fell 0.2% year-on-year in October, same as seen in September, as initially estimated.

Eurozone industrial production declined for the first time in five months in September, Eurostat reported. Industrial output fell unexpectedly by 0.4% in September from August, when it was up 0.6%. Production was forecast to climb 0.7%. This was the first fall since April.

A government report showed the U.K. economy grew by a slower than expected pace in September from August, even before the latest restrictions on businesses.

The UK economy is set to shrink 12% in November due to the second lockdown to tackle the resurgence in the coronavirus pandemic, but rebound strongly next month, the National Institute for Economic and Social Research said.

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2020-11-12 13:05:08

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