European shares remain below record highs
On Monday European shares stood below record highs, as the global spread of the Delta variant of the novel coronavirus raised fears of a slow down in economic recovery, although Morrisons jumped as a takeover battle for the British firm heated up.
The pan-European STOXX 600 dropped by 0.3%, with auto and travel stocks being among the biggest decliners. Mining stocks were among the few gainers, as they increased by 0.9% and tracked metals prices after a U.S. jobs report last week illustrated that the domestic economic rebound remained unchanged but did not yet justify an immediate removal of monetary stimulus. The report also lifted Asian equities to an all-time high earlier in the session after a record close for U.S. equities on Friday.
The benchmark STOXX 600 has fought to regain an all-time high hit in mid-June as the increase in virus cases increased concern of new travel restrictions, while a recent rise in inflation has led to fears of a quick reduction in monetary stimulus despite reassurances to the opposite from the ECB.
After the central bank kept its policy unchanged last month, ECB President Christine Lagarde said on Friday the euro zone economy was beginning to recover from the pandemic-induced slump, but the recovery remained fragile.
French shares dropped by 0.4% as Health Minister Olivier Veran warned France could be moving towards a fourth wave of the pandemic due to the Delta variant. Technology stocks dropped by 0.5%, following a decline in Chinese peers amid worries over Beijing’s crackdown on ride-hailing giant Didi Global and scrutiny of other platform companies in the country.
Shares of Morrisons gained 11.4% to a near eight-year high after U.S. private equity company Apollo Global Management said it was considering a possible offer for the British supermarket group. Morrisons on Saturday agreed to a 6.3 billion pound takeover with another group. Trading volumes are expected to be subdued with U.S. markets closed for an extended 4th of July weekend. 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.