European Shares Decline With Cyclicals Hit by Delta Strain Woes
(Bloomberg) -- European stocks retreated Wednesday as investors balked at risks from a highly infectious coronavirus strain and exited assets that benefit the most from economic reopenings.
The Stoxx 600 Europe Index fell 0.8% by the close in London, with all but one of the sectors declining. The automotive sub-index fell to the lowest in a month, while travel stocks declined on fears that the more contagious Delta variant of Covid-19 could hit tourism as the summer season starts in Europe.
The investor mood soured amid concerns about the pick-up in virus cases and imposition of some travel restrictions after a rally that has seen the Stoxx 600 jump more than 13% this year and post the longest streak of monthly gains since 2013. Market participants are weighing prospects of an economic and profit rebound against inflation and monetary tightening risks.
“We end a very good semester and markets are now in a holding pattern, trading in a range, until earnings season starts, which should be the next catalyst,” said Ignacio Cantos, investment director at ATL Capital in Madrid. “If we see another strong set of results, European markets could still have further upside.”
Read More: Wall Street Strategists See Europe in Sweet Spot: Taking Stock
Among individual moves, GrandVision NV jumped 14% after EssilorLuxottica SA said it will proceed with its planned 7.3 billion-euro ($8.7 billion) purchase of the Dutch eyewear retailer. Wm Morrison Supermarkets Plc climbed 4.5%, with Clayton Dubilier & Rice said to be lining up more financing banks as it considers raising its 5.5 billion-pound ($7.6 billion) offer for British grocer.
- You want more news on this market? Click here for a curated First Word channel of actionable news from Bloomberg and select sources. It can be customized to your preferences by clicking into Actions on the toolbar or hitting the HELP key for assistance.
©2021 Bloomberg L.P.