Europe close: Stocks slump on Covid-19 Delta variant worries
By Alexander Bueso
Date: Thursday 08 Jul 2021
(Sharecast News) - European stocks finished firmly in the red, alongside a retreat in government bond yields, amid growing concerns about the impact that the Covid-19 Delta variant will have on economic growth in the region - at least in the next few months.
"European markets have led the losses today, with indices throughout the region losing over 2% amid a continued slump in Treasury yields," said IG senior market analyst Josh Mahony.
"Despite the expectation that we should be filled with optimism over a second-half rebound, we are instead seeing traders focus on the bumpy road ahead and implications of rising inflation levels."
The pan-European Stoxx 600 index was down 1.72% at 451.61.
France's CAC 40 fell 2.01% to 6,396.73 and Germany's Dax dropped 1.73% to 15,420.64.
In the background, and adding to the pressure on debt yields perhaps, was the release overnight of the minutes of the US central bank's last policy meeting, which revealed preparations had begun for an eventual 'tapering' - although no exact timeline was discussed.
The European Central Bank meanwhile announced that from now on it would target a moderately higher level of inflation - although most analysts seemed unenthused by the announcement.
Worth noting, travel-related stocks got a late shot in the arm after the UK's Secretary for Transport, Grant Shapps, announced that fully inoculated travellers from 'amber' countries such as Spain would be able to return to the UK from 19 July without having to quarantine.
In other equity news, remote connectivity software specialist Teamviewer slumped 14% after the company posted weaker-than-expected billings growth for its second quarter.
B&M Value Retail shares fell, although the company reported a strong start to the year with first-quarter UK like-for-like sales up by more than a fifth compared with pre-pandemic levels.
German automotive lighting group Hella rose 1.5% even after brakes maker Knorr-Bremse dropped plans to acquire a 60% stake in the company. Knorr-Bremse shares slipped 2%.
In the UK, Deliveroo gave back 2% despite posting an 88% jump in orders during the June quarter.
Also on the upside, Ladbrokes owner Entain gained after it increased its guidance for full-year earnings following a strong performance from the gambling group in the first half.
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