European markets closed sharply lower on Tuesday, with spikes in coronavirus cases in several parts of the world, including in the world’s second-most populous country India, denting hopes about a quick global economic recovery.
Rising U.S. Treasury yields weighed as well on stocks. Investors were also looking ahead to the European Central Bank’s monetary policy meeting on Thursday.
Travel related stocks tumbled after the U.K. decided to put India on its ‘red list’ of travel destinations due the massive surge in coronavirus infections in the Asian country.
Tobacco stocks plunged on reports that the Biden administration is considering requiring tobacco companies to reduce the nicotine levels in all cigarettes sold in the United States.
Investors were also reacting to the latest batch of economic data from the region, and tracking quarterly earnings announcements.
The pan European Stoxx 600 tumbled 1.9%. The U.K.’s FTSE 100 plunged 2%, Germany’s DAX slid 1.55%, France’s CAC 40 fell 2.09% and Switzerland’s SMI lost 1.17%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey ended with sharp to moderate losses. Greece edged up marginally.
In the UK market, IAG ended more than 8% down. British American Tobacco and Imperial Brands lost 7.6% and 7.3%, respectively. Associated British Foods shares shed about 6% after the food processing firm reported a fall in pretax profit for the first half of fiscal 2021.
Rolls-Royce Holdings, Melrose Industries, Whitbread, Glencore and Standard Chartered ended lower by 4 to 6%.
Lloyds Banking, Royal Dutch Shell, JD Sports Fashion, Prudential and M&G also declined sharply.
Segro, Polymetal International, Avast and AstraZeneca closed notably higher.
In the French market, Air France-KLM, Atos, Technip, BNP Paribas, Airbus Group, Societe Generale, Renault, Vinci, Safran and ArcelorMittal tumbled by 4 to 6%. Danone SA shares declined sharply after the company reported that its first-quarter consolidated sales were 5.66 billion euros, down 9.4% from 5.66 billion euros last year.
In Germany, Lufthansa declined more than 6%. Thyssenkrupp lost nearly 6%. Deutsche Bank, Infineon Technologies, MTU Aero Engines, Daimler, Adidas, Volkswagen, Siemens, RWE, BMW and Continental also closed sharply lower.
In economic news, the UK unemployment rate dropped unexpectedly in three months to February, falling to 4.9%, data from the Office for National Statistics showed. Economists had forecast the rate to rise to 5.1% from 5% in three months to January.
At the same time, the employment rate dropped 0.1 percentage points from the previous quarter to 75.1%, the data showed.
Germany’s producer prices increased in March at the fastest pace since late 2011 driven by higher energy and intermediate product prices, Destatis said. Producer price inflation accelerated sharply to 3.7% in March from 1.9% in February.
Month-on-month, producer prices gained 0.9% versus a 0.7% rise in the prior month. Economists had expected a 0.6% rise.
Market Analysis
European Markets Close Sharply Lower On Virus Jitters
2021-04-20 18:09:00
