Make Kitco Your Homepage

Travel stocks weigh on Europe as coronavirus cases pick up

Kitco News

(Reuters) - European stocks struggled for momentum on Friday, with travel and bank stocks falling as a resurgence in coronavirus cases across the continent rekindled fears about the pandemic’s impact on a nascent economic recovery.

The pan-European STOXX 600 index .STOXX was flat, while travel and leisure stocks .SXTP shed the most among sectors with a 2.4% fall.

France registered a record 10,593 new confirmed coronavirus on Thursday, the highest single-day count since the pandemic began, while talks of a second lockdown were doing the rounds in the United Kingdom with hospital admissions doubling every eight day.

“If the uptick in cases becomes strong enough that lockdowns have to be tightened to a point that it derails the economic recovery, then it becomes a risk factor,” said Mobeen Tahir, associate director of research at fund house Wisdom Tree.

Banks .SX7P fell 1% and were on course for a third week of decline as major central banks pledged to keep interest rates lower for a long time, with the Bank of England looking at taking borrowing costs to sub-zero levels, if needed.

The grim outlook for the sector did not stop Caixabank CABK.MC from offering to buy state-owned Bankia BKIA.MC for 4.3 billion euros ($5.10 billion) to create Spain's biggest domestic bank.

Bankia BKIA.MC slipped 2.4% and Caixabank CABK.MC was flat. The blue-chip Spanish index .IBEX fell 0.9%.

Despite subdued market action on Friday, the STOXX 600 is on course to end with a small weekly gain as some major retail companies showed resilience in earnings this week and M&A activity picked up.

The London Stock Exchange Group LSE.L entered exclusive talks to sell Borsa Italiana to France's Euronext ENX.PA, driving its shares up 3.6%. Deutsche Boerse DB1Gn.DE, which had also launched an offer earlier this month, rose 0.2%.

Swedish telecoms gear maker Ericsson ERICb.ST was up 2.3% after it agreed to buy U.S.-based wireless networking company Cradlepoint in a $1.1 billion deal.

Germany's Covestro 1COV.DE gained 7% even after it rejected a report that it was in takeover talks with private equity firm Apollo Global Management APO.N. The stock had surged 11% earlier following the report.

Roche ROG.S rose 2.4% after it said its Actermra/Roactemra drugs reduced the need for mechanical ventilation in patients with COVID-19-related pneumonia.

Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D’Silva

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.