European Stocks in Risk-Off Slump as Most-Shorted Shares Surge
(Bloomberg) -- European stocks slid the most in five weeks as the region’s authorities struggled to resolve vaccine delivery snags with AstraZeneca Plc and Britain tightened travel curbs. Heavily shorted shares rallied, mirroring the U.S.
The Stoxx Europe 600 Index slumped 1.2% at the close, with basic resources and technology shares falling the most. Several heavily-shorted stocks, including Klepierre SA and Pearson Plc, jumped in an echo of the rally of U.S. gaming retailer GameStop Corp., which has been boosted by day traders’ efforts to force a squeeze on short bets.
European shares have struggled to make headway since reaching an almost 11-month high on Jan. 14, as investors weighed rising Covid-19 cases and tightening restrictions against the prospects of a vaccine-fueled economic recovery later in the year. European Union officials are seeking to resolve a standoff with AstraZeneca that threatens to keep its vaccination program in the slow lane.
“The end of the pandemic keeps being pushed further and further and for Europe, it’s key to see a feasible end with a successful vaccination program,” said Alfonso Benito, chief investment officer at Spanish asset manager Dunas Capital. “It’s important for the region that tourism returns in time for the summer holidays.”
Danish health care supplier Ambu A/S rose the most among members of the benchmark after its first-quarter sales beat estimates. At the opposite end of the table, precious metal miner Fresnillo Plc dropped 13% following production guidance that RBC said missed expectations.
Later, investors will be closely watching at U.S. Federal Reserve’s Chairman Jerome Powell comments on future bond buying after the first meeting of the year ends today.
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