Europe close: Coronavirus worries weigh on stocks
By Alexander Bueso
Date: Monday 27 Jul 2020
(Sharecast News) - Stocks in Europe traded slightly lower on Monday, weighed down by concerns around a possible second wave of Covid-19 infections, particularly in Spain, and ongoing tensions between China and the US.
Underscoring the former, at the weekend the UK government imposed a 14-day quarantine period on travellers from Spain following a rash of outbreaks in the Mediterranean country centred on the Catalonia region.
Overnight meanwhile, Chinese authorities moved to close down the US consulate in Chengdu even as authorities in the country reported the largest flare-up of Covid-19 cases in over four months, with 61 infections, mostly in the west of China.
Echoing the mood in markets, European Central Bank governing council member, Fabio Panetta told La Repubblica that "it's too soon to declare victory".
By the end of trading, the benchmark Stoxx 600 was lower by 0.31% to 366.15, while the German Dax was flat at 12,838.66 while the FTSE Mibtel had slipped 0.28% to 20,019.96.
In parallel, euro/dollar was 0.76% higher to 1.1745, alongside another sharp gain for gold futures which were last trading up by 1.41% to $1,952.30/oz..
Pacing losses on the Stoxx were Travel&Leisure names, with a sub-index for the group down 3.35% and shares of IAG off by 6%.
Spain's Ibex 35 meanwhile gave back 1.7% to 7,170.60.
Adding to the pressure on Travel&Leisure stocks, Ryanair Holdings posted a €185m loss for the three months to June and cautioned about the impact that a second wave of coronavirus infections might have, even as Europe's largest budget carrier reiterated plans to gradually resume flights.
SAP AG on the other hand reported a 1% increase in second quarter sales to reach €6.74bn for a 7% gain in earnings per share to €1.17 on a non-IFRS basis.
The German software provider also unveiled plans to float and list its Qualtrics unit in the US, sending its stock up by 2%.
Stock of another German company, payments outfit Wirecard AG pace gains on the Stoxx 600, on the back of reports of heavy interest in its core business unit from dozens of potential buyers.
Gold miner Polymetal was another top gainer on the Stoxx 600.
On the economic side of things, the IFO Institute's widely-followed business business confidence gauge jumped from a reading of 86.3 for June to 90.5 in July for July (consensus: 89.3).
Money supply growth in the Eurozone also continued to pick up in June, figures from the European Central Bank revealed, with the annual rate of growth in M1 money supply rising from 12.5% for May to 12.6% in June.
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