European Stocks Close Lower After Cautious Session

European stocks closed broadly lower on Monday, weighed down by concerns about a surge in coronavirus infections in several countries and amid caution ahead of U.S. earnings season, and release of inflation and retail sales data from the world’s largest economy.

In the UK, Prime Minister Boris Johnson urged people to continue to “behave responsibly” as non-essential shops, restaurants, pubs and gyms are reopening today in the latest stage of the coronavirus lockdown easing in the country.

The Dutch government announced plans to extend night curfew and other restrictions until April 28. Germany is reportedly looking to introduce a bill that would give national government power to impose restrictions in states with high infection rates.

Markets also reacted to Federal Reserve Chairman Jerome Powell’s reiteration on Sunday that the central bank wants to see inflation rise above its 2% target for an extended period before the monetary policy committee moves to raise interest rates.

The pan European Stoxx 600 slid 0.46%. The U.K.’s FTSE 100 ended 0.39% down, Switzerland’s SMI fell 0.51%, while Germany’s DAX and France’s CAC 40 both ended lower by 0.13%.

Among other markets in Europe, Belgium, Denmark, Finland, Ireland, Netherlands, Norway, Portugal, Spain, Sweden and Turkey ended weak.

Czech Republic, Greece, Poland and Russia closed higher, while Austria and Iceland settled flat.

In the French market, Veolia rallied nearly 10% and Suez gained almost 8% after companies announced a merger deal that values Suez at 20.50 euro per share.

Sanofi shares moved higher after the company said it will invest 400 million euros over next five years to build a vaccine production site in Singapore. It expects the project will create up to 200 local jobs.

In the UK market, Rolls-Royce Holdings, RightMove, Taylor Wimpey, Kingfisher, Next, Ocado, B&M and Pesimmon lost 2 to 3.3%.

In Germany, Lufthansa, MTU Aero Engines, Infineon Technologies and Merck ended notably lower, while Daimler, BMW, E.ON, Covestro, Deutsche Post and HeidelbergCement posted solid gains.

Lloyds Banking, Just Eat Takeaway, Admiral Group, United Utilities, Coca-Cola and BP ended with strong gains.

On the economic front, February retail sales data for the Eurozone was down 2.9% year-over-year, while consensus was down 5.4%. On a month-over-month basis, February retail sales grew 3% versus 5.2% drop in January.

Further, data from Statistics Denmark showed that Denmark’s consumer price index rose 1% year-on-year in March, following a 0.6% increase in February. Meanwhile, Denmark’s industrial production dropped in February.

Turkey’s jobless rate increased in February to 14.1% from 13.4% in January. Data from Statistics Finland showed that Finland’s current account surplus increased in February.

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