Virus worries lead European stocks towards the worst week since June

European stocks recorded their worst weekly decline since mid-June on Friday, as investors feared that a second wave of coronavirus infections will hamper economic recovery, while banking stocks sank to an all-time low.

The pan-European STOXX 600 index slipped 0.1%, failing to match Wall Street gains on signs that U.S. lawmakers were making progress on a $2.2 trillion stimulus package that could be voted on next week. The index shed 3.6% in a week dominated by concerns about new coronavirus restrictions in Europe, a faltering stock rally in Wall Street’s technology giants and worrying economic data from both sides of the Atlantic.

France and Britain set new records of daily COVID-19 infections on Thursday, while the Spanish government recommended reimposing a partial lockdown on all of the city of Madrid after the country surpassed 700,000 cases, the highest number in Western Europe.

European banks sank to a fresh record low as investors shunned the sector hit by a cocktail of lower global borrowing costs, rising bad loans due to the economic downturn and dirty money scandal that made it the worst performer this week.

Tech stocks led the way higher on Wall Street on Friday, as they have of late on days governed by worries over the economic recovery. The gains offset losses elsewhere, and an index of major stock markets globally was up on the day.

Emerging market stocks lost 0.25%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.23% higher, while Japan’s Nikkei rose 0.51% to end a three-day week.

The dollar’s strength this week has also battered commodities, with gold set for its biggest weekly drop since March. On Friday, spot gold dropped 0.4% to $1,860.10 an ounce. Silver tumbled 14% this week so far, a drop not seen in over six months.

Oil prices fell and were set for a weekly decline mostly due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections.

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.