European Stocks Weaken as Covid Damage Mounts

European Stocks Weaken as Covid Damage Mounts

Investing.com  | Jan 15, 2021 08:40

European Stocks Weaken as Covid Damage Mounts

By Peter Nurse 

Investing.com - European stock markets traded lower Friday, with investors weighing increased Covid-related restrictions with the announcement of additional U.S. stimulus.

At 3:40 AM ET (0840 GMT), the DAX in Germany traded 0.4% lower, the CAC 40 in France fell 0.7% and the U.K.'s FTSE index dropped 0.7%.

The coronavirus continues to hit European economies hard. The U.K. reported earlier Friday that its GDP fell 2.6% in November, back to 8.5% below the levels seen in February 2020, with the service sector acting as the main drag on growth.

France announced Thursday it will bring forward its night curfew by two hours for at least a fortnight, while Germany’s government is weighing up tougher lockdown restrictions as countries throughout the continent try to slow the spread of the virus.

Italy, the euro-zone’s third-biggest economy, is not only suffering from a resurgent coronavirus outbreak but also a deepening political crisis, after former Prime Minister Matteo Renzi pulled his Italia Viva party out of the ruling coalition government, denying it a majority in parliament. 

These woes have overshadowed U.S. President-elect Joe Biden’s overnight proposal of a $1.9 trillion stimulus plan to support the world's largest economy. The bill had been widely expected, especially after the Democrats won control of the Senate in early January as well as holding the House of Representatives. 

In corporate news, SAP  (DE:SAPG) stock rose 1.9% after the software company reported a hefty rise in operating cash flow and raised its forecasts. Remaining in software, AVEVA (LON:AVV) stock soared 4.4% after the U.K. company also reported a 26% rise in currency-adjusted revenue in the fourth quarter.

British American Tobacco (LON:BATS) stock rose 0.1% after the U.K. Serious Fraud Office closed a three-year investigation into suspected bribery, but oilfield services provider Petrofac (LON:PFC) was less fortunate, falling 18% after admitting that an SFO investigation had resulted in a former employee admitting additional charges against him. Current employees of the group are alleged to have acted in concert with the person in question, but have not yet been charged.

In France, Carrefour (PA:CARR) stock slumped 4.8% after the French government voiced its strong opposition to its being potentially taken over by Canada's Alimentation Couche-Tard.  

Oil prices weakened Friday amid concerns about a resurgence of Covid-19 cases in China, the world’s largest crude importer, with the country reporting the highest number of daily cases in more than 10 months on Friday. This has prompted the lockdown of more than 28 million people this week, potentially hitting demand.

U.S. crude futures traded 0.8% lower at $53.13 a barrel, while the international benchmark Brent contract fell 1.2% to $55.74. 

Elsewhere, gold futures rose 0.1% to $1,852.15/oz, while EUR/USD traded 0.2% lower at 1.2129.

 

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Martin Wall
Martin Wall

We are doomed. or we could ignore it and carry on, but governments will not  ... (Read More)

Jan 15, 2021 11:20 GMT· Reply
Mareks Boriss
Mareks Boriss

O really! But where is stimulus and hopes?  ... (Read More)

Jan 15, 2021 10:10 GMT· Reply
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