FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 17, 2021. REUTERS/Staff
November 19, 2021
By Anisha Sircar
(Reuters) – European stocks gave up early gains on Friday as concerns over the economic damage from fresh COVID-19 lockdowns in the region hammered cyclical sectors such as banks and automakers.
The pan-European STOXX 600 index fell 0.3% after hovering near record highs earlier in the session.
It lost ground after news that Austria will become the first country in western Europe to reimpose a full COVID-19 lockdown this autumn to tackle a new wave of infections.
Germany’s Health Minister Jens Spahn said the coronavirus situation in the country was so grave that a lockdown, including for people who have been vaccinated, cannot be ruled out.
Frankfurt shares fell 0.4%, while sectors more exposed to economic cycles such as banks, automakers and travel & leisure fell between 1.4% and 2.8%.
South European markets, including those in Spain and Italy, fell more than 1% each.
“COVID-19 is getting worse in Europe, but the virus is having less of an effect on stock markets compared to the first wave as vaccines roll out and treatment progresses,” said Capital Economics market economist Thomas Mathews.
“But if things worsen and a major part of the economy goes into lockdown, it might start to take a toll on regional stock markets.”
European stocks have hit a series of record highs this month as a stronger-than-expected earnings season helped investors look past concerns about rising inflationary pressures.
European Central Bank President Christine Lagarde said inflation in the euro zone will fade so the ECB should not tighten policy as it could choke off the recovery, and hinted at continued bond purchases next year.
The ECB is due to decide on the future of its bond-purchase programmes at its Dec. 16 policy meeting.
Irish airline Ryanair dropped 2.6% after announcing its intention to delist from the London Stock Exchange, citing costs related to retaining an additional listing.
French luxury group Hermes gained 5.1%, after jumping more than 6% in the previous session, on market talks that it may be added to the Eurostoxx 50 index during a December review.
Focus is also on Moody’s imminent review of Greece’s credit rating, with analysts expecting an upgrade due to better-than-expected macro trends. Greece’s main Athens stock index has rallied about 15% this year on a broader rebound in the economy.
(Reporting by Anisha Sircar and Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Aditya Soni)
Source: One America News Network
