European stocks post worst weekly drop since October as vaccine woes escalate

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European stocks post worst weekly drop since October as vaccine woes escalate

On Friday, a flurry of European stock indices had wrapped up the session sharply lower and recorded their steepest weekly percentage decline in more than four months amid lingering concerns over a much slower-than-anticipated rollout of a pandemic vaccine, while a weaker human trial data of J&J’s pandemic vaccine candidate that had shown a 66% efficacy rate, weighed on investors’ sentiment.

Aside from that, a retail-frenzy led volatility in the Wall Street, which had forced a number of hedge funds to ditch out long-buy positions of safer bets such as Microsoft and Apple stocks in order to cover up the steep losses they had to stomach on short-sell positions for stocks likes of GameStop and AMC, added to further strains.

European shares erase all of their January gains

In point of fact, Friday’s downfall of a basket of European bourses was largely catalysed by growing concerns over potential fiscal damages stemming off a new pandemic-pathogen strain which health experts said could be more contagious than other prototypes, while a delayed rollout of pandemic vaccination campaign in the 26-member bloc had fanned up the flames further.

However, European regulators had approved AstraZeneca’s pandemic candidate for inoculation purpose on Friday which in effect had kept a lid on the losses. Citing statistics, in the day’s European market round off, regional Pan-European STOXX 600 winded up the day 1.9 per cent lower, closing out the week with a percentage decline of 3.1 per cent.

Apart from that, Frankfurt’s DAX dwindled 1.7 per cent and UK’s blue-chip index FTSE 100 faltered 1.8 per cent, while French CAC 40 eased 2.02 per cent. Elsewhere in the Europe, Italy’s FTSE MIB muzzled 1.57 per cent to 21,572.53, while Madrid’s benchmark IBEX 35 had been hit with a hefty whiplash of 2.21 per cent to close out the session at 7,757.50.

Meanwhile, referring to investors’ caution over vaccine-led worries, a global chief strategist at HSBC Global Asset Management in London, Joseph Little said, “We’re postponing the recovery story a little bit because of the lockdown measures and challenges for European growth.

I’m still optimistic on parts of Europe which have lagged rather badly, economically and in markets. They could begin to perform as the cyclical catch-up becomes more important”.