European shares pull back as second wave concerns rise
European shares were down on Thursday as a spike in COVID19 cases in China and some U.S. states triggered fears of a second wave of infections, knocking back hopes of a swift recovery from the pandemicled economic slump.
Investors scaled back on risk as the daily count of cases hit new highs in California and Texas, two of the United States’ most populous states, while Beijing ramped up movement curbs on Wednesday.
The pan-European STOXX 600 index fell 0.3% after two straight days of gains, driven by optimism over global stimulus helping economies claw back from the coronavirus-led slide.
Cyclical stocks led declines, with oil & gas, miners and banks falling about 1% each, suggesting the mood remained largely risk-off in early European trading.
Aggressive monetary and fiscal stimulus and less-than-dire economic data have helped European indexes regain about 36% from their March lows, but analysts say another wave of infections could lead to worries of more restrictions and weigh on consumer behaviour.
Madrid-listed shares of Siemens Gamesa tumbled 8.2% after the wind turbine maker replaced Chief Executive Markus Tacke with Andreas Nauen and warned of an operating loss in the third quarter late on Wednesday.
German online fashion retailer Zalando rose 5.3% to the top of STOXX 600, after forecasting a bigger increase in sales and operating profit in the second quarter than analysts’ expectations as the pandemic prompts more people to shop online.
Milan-listed shares, however, added 0.4% led by a 2.1% rise in industrial and farm equipment maker CNH Industrial after brokerage Jefferies said trucks remain more attractive than cars.
The European Council is in focus as it meets on Friday to discuss a recovery proposal by the bloc’s executive arm to raise 750 billion euros worth of debt to top up spending from joint coffers to be worth 1.1 trillion euros in 2021-27.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.