Europe close: Shares knocked off perch by late wave of selling
By Alexander Bueso
Date: Thursday 18 Nov 2021
(Sharecast News) - European shares slipped on Thursday with a late wave of selling knocking German and French issues off their record highs amid talk of fresh lockdown measures in the euro area's largest economy and that China was mulling the release of some of its strategic oil reserves.
"Talk of tighter covid restrictions being rolled out incrementally across Europe appears to be tempering risk appetite, over concerns of lower demand heading into the winter months," said Michael Hewson, chief market analyst at CMC Markets UK.
"[...] Wider concerns about enduring inflation also appear to be limiting the appetite for further strong gains, even as bond yields also slip back from their recent highs."
The pan-European Stoxx 600 was down 0.46% at 487.70, with all of the main regional bourses finishing in the red.
Germany's DAX meanwhile drifted lower by 0.18% to 16,221.73 while France's CAC 40 gave back 0.21% to see the day out from 7,141.98.
Chancellor Angela Merkel was reportedly talking with regional leaders about imposing tougher Covid-19 restrictions amid a record number of daily infections.
German 10-year Bunds on the other hand were a tad higher, while the euro and front month Brent crude oil futures were bouncing back.
Investors were also taking a back seat after data released during the previous session showed that the year-on-year pace of Eurozone inflation hit 4.1% in October, more than double the European Central Bank's target.
In London, the pressure was on the Bank of England to lift borrowing costs after the consumer price index came in at 4.2% in October - its highest in almost a decade as energy and automotive costs soared.
The BoE had raised eyebrows earlier during the same month after balking at a rate rise, despite indicating that one was imminent.
Oil stocks suffered on the back of worries of a supply overhang and China thinking about a possible release of strategic fuel reserves.
"Crude oil has suffered sharp losses over the past 24 hours, with (US President Joe) Biden's calls for a release of strategic reserves overshadowing the decline in US stockpiles announced yesterday," said said IG analyst Joshua Mahony.
"A simultaneous release of stocks from both the US and China certainly brings some short-term relief given today's declines, but there remains plenty of questions over whether the lack of new investment will ultimately lead to a long-standing supply deficit that pushes up energy prices for years to come."
Thyssenkrupp shares climbed 6% after the German conglomerate beat profit expectations and lifted its 2022 outlook.
Daimler shares were up as Berenberg initiated coverage with a 'buy' recommendation' citing the earnings potential of its recently spun-off truck division.
Housebuilders were on the rise after Crest Nicholson lifted its full-year profit expectations. Persimmon, Bellway, Taylor Wimpey, Barratt and Berkeley were all higher on a read-across.
UK manufacturing engineer Rotork slumped as it warned of supply chain pressures on revenues due to computer chip shortages.
Shares in Polish parcel locker operator InPost slumped again after Wednesday's disappointing earnings outlook, and despite announcing a new deal on Thursday allowing eBay sellers access to its 2,500 parcel lockers.
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