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European stocks hit by fears of new virus wave

Written by Business World, on 24th Jun 2020. Posted in EU

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European stocks fell from a two-week high on Wednesday as investors turned cautious following a surge in the number of coronavirus cases globally.

The pan-European STOXX 600 fell 1.5%, with the economically sensitive sectors such as travel & leisure, automakers and banks leading declines.

Many U.S. states reported record daily increases in COVID-19 infections amid easing of lockdowns, while a media report that European Union countries are prepared to bar entry to Americans raised worries of further restrictions.

"While the economic impact of such measures will be less than shutting down an entire economy, a recovery of this nature is a messier story for investors to digest and this could act as a drag on equities," AJ Bell investment director Russ Mould wrote in a morning note.

Risk appetite got a boost on Tuesday after data showed improving business activity in France and Germany as well as on White House reassurances about the Phase One U.S.-China trade deal.

But European Central Bank chief economist Philip Lane said that solid data may not be a good guide to how the euro zone recovers from the crisis.

Germany's DAX was down 1.9% despite Ifo institute's survey showing the strongest rise ever recorded in the country's business morale in June.

The top decliner on the STOXX 600 was Sweden's Evolution Gaming Group AB, which fell 9.4% after it offered to buy NetEnt AB for 19.6 billion Swedish crowns ($2.12 billion). NetEnt's shares jumped 27.5%.

German real estate company Leg Immobilien fell 3.4% after plans to launch a capital increase through stock and debt offering.

Austrian sensor maker AMS rose 6.3% after JPMorgan upgraded the stock to "overweight" from "neutral", while Dialog Semiconductor jumped 8.7% after raising its quarterly revenue outlook.

London's Premier Foods rose 5% as it expects revenue and trading profit this year to exceed current estimates.

Europcar Mobility jumped 11.9% on news Volkswagen AG was in talks to acquire the French car rental firm. (Reuters)

Source: www.businessworld.ie

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