European shares totter as travel stocks slump after rise in pandemic cases

As a number of European countries spanning from the shores of Greece to the port cities of Norway had re-imposed pandemic restrictions, European stocks ended the day broadly lower with travel and leisure stocks leading the losses

by Sourav D
European shares totter as travel stocks slump after rise in pandemic cases

On Friday, a bundle of European bourses had wrapped up broadly lower with France’s CAC 40 leading the losses, as a pandemic resurgence in Europe ahead of what could be the worst winter in many decades, in particular for the elderly with underlying clinical conditions, had revamped frets of the pandemic outbreak’s fiscal fallouts.

In point of fact, Friday’s tattering of the European stocks had almost entirely been catalysed by a broad-base sell-off of the travel stocks, while big-league lenders alongside auto shares had also faltered over the narratives of a sluggish economic recovery.

European stocks end broadly lower as travel stocks drag

Concomitantly, following a 2.2 per cent slump in Spain’s banking-heavy IBEX alongside a more than 1 per cent plunge in French and Italian travel stocks, had led to a ruin of 0.7 per cent of the regional pan-European STOXX 600.

Apart from a pandemic resurgence, which had been pouring fresh scorns over the travel stocks, possibilities of an extension of a negative interest rate on deposits for an indefinite period amid a pandemic-driven fiscal slowdown at large, had also been taking a hefty toll on investors’ morale, as the British Airways-owner easyJet and the cruise operator Carnival fell between 8 per cent and 15 per cent followed by an initiation of talks of a second phase of nationwide lockdown in United Kingdom.

Besides, as other eurozone nations spanning from the shores of Greece to the port cities of Denmark had re-imposed pandemic restrictions later this week, the travel and leisure stocks had borne the heaviest brunt on the day’s European market.

Citing statistics, on Friday’s European market closure, London’s FTSE 100 faltered 0.71 per cent to 6,007.05 and French CAC 40 had nosedived 1.22 per cent to 4,978.18, while Frankfurt’s DAX had dwindled 0.70 per cent to wind down the day at 13,116.25.

Elsewhere in the Europe, Italy’s FTSE MIB had taken a header of 1.09 per cent to 19,524.94, while Madrid’s benchmark IBEX 35 had been hit with a whiplash of 2.21 per cent, rounding off the day at 6,929.80. Concomitantly, citing that a second-phase of lockdown would likely to switch on a flight-to-safety mode among the investors, an associate director of research at fund house Wisdom Tree, Mubeen Tahir said, “If the uptick in cases becomes strong enough that lockdowns have to be tightened to a point that it derails the economic recovery, then it becomes a risk factor.