European Stocks Fall Most Since June on Fears Over Lockdowns
European Stocks Drop Most Since July as HSBC Leads Bank Slump
(Bloomberg) -- European stocks tumbled the most since June 11 on Monday, hit by mounting worries there could be new lockdowns as coronavirus cases surge, while banks slumped after a cache of leaked documents suggested increased scrutiny on suspect transactions.
The Stoxx Europe 600 Index dropped 3.2% to close at its lowest level since July 31, while Germany’s DAX sank 4.4%, the most since June 11. Banks and travel and leisure shares were the worst industry performers amid lockdown concerns, sinking more than 5% each.
Banks tumbled after an investigative report on lenders’ lapses in reporting suspicious activity. HSBC Holdings Plc also retreated after the Chinese Communist Party’s Global Times newspaper said that it’s a candidate for the country’s “unreliable entity list.”
European equities are sliding on worries a resurgence of Covid-19 will prompt further restrictions and hamper a nascent economic recovery. Germany’s health minister said the trend of cases in Europe is “worrying,” while the U.K.’s chief medical officer urged the population to take the virus “very seriously” for the next six months as the country enters the more dangerous autumn and winter months.
“Virus resurgence is a clear reality check for market participants who have been somewhat complacent regarding the trajectory of the markets,” said Tradition strategist Stephane Ekolo. Earnings-per-share revisions are likely to deteriorate, he said. “All in all, it is a tug war between expectation and reality.”
U.S. stocks also fell, which didn’t help sentiment across Europe. The S&P 500 Index’s fourth daily decline took it down nearly 10% from a record high hit earlier this month.
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