By Geoffrey Smith and Peter Nurse
Investing.com -- The sell-off in European stock markets accelerated mid-morning Friday as Covid-19-related lockdowns returned to the continent, setting the stage for another potential economic contraction over the winter.
Austria said it will reimpose a nationwide lockdown and will also introduce mandatory vaccination from February, in an effort to stem a spiralling infection rate. Germany's health minister Jens Spahn also refused to rule out similar measures, prompting fears that Europe's largest economy could be shut down for the third winter in a row.
At 5:08 AM ET (1008 GMT), the DAX in Germany traded 0.3% lower, the CAC 40 in France fell 0.5% and the U.K.’s FTSE 100 traded 0.3% lower. The worst-hit markets were oil-sensitive Russia, which fell 1.8% and travel and tourism-heavy Spain, which fell 1.7% as the original pattern of pandemic trades reasserted itself.
Non-Covid news was also less than stellar on Friday: German producer price inflation numbers for October showed prices rising another 3.8% on the month, taking the annual rate of factory gate inflation in Europe's largest economy up to 18.4%.
French data also showed unemployment rising more sharply than expected to 8.1% of the workforce in the third quarter.
By contrast, the latest GfK consumer confidence index in the U.K. unexpectedly rose to -14 from -17 in October, while the country’s retail sales rebounded more strongly than expected in the same month, by 0.8%. This further fleshed out a picture of an economy that is strong enough to withstand a modest increase in interest rates by the Bank of England with Covid cases in this country now falling.
In corporate news, Kingfisher (LON: KGF ) stock fell 4% after the DIY giant reported a drop in sales year-on-year as consumer spending balanced out after the pandemic.
Airline and airport stocks tumbled, with IAG (LON: ICAG ), the owner of British Airways and Iberia, losing 4.9% and EasyJet (LON: EZJ ) stock falling 5.3%. Online payments company Adyen (AS: ADYEN ) and meal kit deliverer HelloFresh (DE: HFGG ) went in the other direct, gaining 2.0% and 6.8% respectively. Delivery Hero (DE: DHER ) also rose 3.6% while Just Eat Takeaway (AS: TKWY ) rose 4.6%.
Later Friday, the U.S. House of Representatives is set to vote on the Democratic Party's $2 trillion spending bill after Speaker Nancy Pelosi finally appeared to have overcome internal divisions in her party. Wall Street is set to end the week on a calm note, with broad confidence in the U.S. economy only partly dimmed by pockets of uncertainty.
In oil markets, U.S. crude futures continued to move lower, set to recover hefty weekly losses, as the U.S., China and India plot a coordinated release of strategic petroleum reserves.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.