European stocks hit late-May lows as lockdown fears rattle investors
Frankfurt (Oct 28) Losses accelerated across European stock markets on Wednesday, with the benchmark STOXX 600 tumbling to its lowest level since late-May on fears of a new national lockdown in France and tighter curbs elsewhere to combat a surge in coronavirus cases.
The pan-European STOXX 600 index .STOXX fell 2.4%, while Germany's DAX .GDAXI and France's CAC 40 .FCHI both plunged 3.3% and UK's FTSE 100 .FTSE dropped 2.2%.
The French government has been exploring a new, national lockdown from midnight on Thursday, BFM TV reported, albeit a slightly more flexible one than the two-month shutdown that began in mid-March.
President Emmanuel Macron will give a televised address later in the evening, his office said.
Meanwhile, German Chancellor Angela Merkel wants to close all restaurants and bars from Nov. 4 according to a draft resolution seen by Reuters, while the Telegraph newspaper reported British Prime Minister Boris Johnson is under pressure for a new lockdown.
“Global markets look incredibly nervous, the mix of rising COVID-19 cases and deaths and the potential full lockdown in France, add this to the uncertainty ahead of the U.S. elections and you have a very poor backdrop,” said John Woolfitt, director of trading at Atlantic Capital Markets.
“I don’t expect this to be long-term, but nervousness will continue until elections are done and some form of steadying in the COVID-19 numbers.”
Economically sensitive sectors such as automakers .SXAP, banks .SX7P and insurers .SXIP led declines, falling between 3.9% and 4.4%.
U.S. futures EScv1 also slid over 1% as investors stayed on the sidelines with no stimulus package in sight and just a week to go before the U.S. presidential election.
The downbeat mood overshadowed a batch of upbeat quarterly results from European companies.
Deutsche Bank AG DBKGn.DE reported a surprise swing into quarterly net profit and upgraded the revenue outlook for its investment bank, but its shares fell 4.2%.
Carrefour CARR.PA delivered its strongest quarterly underlying sales growth for at least two decades. Shares of Europe's largest retailer, however, dropped 2.5%.
German online takeaway food company Delivery Hero DHER.DE was among the few gainers, up 4.1%, after it raised its guidance for 2020 sales for the second time this year.
Reuters
