By Sruthi Shankar and Shreyashi Sanyal
(Reuters) – European stocks slid on Friday after France imposed fresh regional lockdowns to curb the spread of the coronavirus, amid concern over the pace of vaccination campaigns in some countries, while bank stocks led sectoral declines.
The pan-European STOXX 600 fell 0.8%, with France’s CAC 40 dropping 1.1% after the nation imposed a new four-week lockdown from Friday in 16 regions badly hit by the COVID-19 crisis.
“The new lockdown will have a significant impact on economic activity and further deteriorate France’s economic outlook for the first part of 2021,” said Charlotte de Montpellier, economist, France and Switzerland, at ING.
“The current slow pace of the vaccination campaign leaves little hope for a full lifting of the restrictions after the end of the 4-week lockdown.”
French hotel group Accor, Air France and catering company Sodexo were flat to lower.
Concerns over the pace of vaccination gained ground after Britain said it will have to slow its rollout next month due to a supply crunch caused by a delay in shipment.
“We are in this awkward phase where we are clearly seeing light at the end of the tunnel even through slow vaccination,” said Philipp Lisibach, chief global strategist at Credit Suisse in Zurich.
“Nonetheless, in the summer we expect that many countries will be in a position to lift some of the restrictions and we expect that this is going to be the kick-off of a sharp economic reacceleration in Europe.”
European stocks still gained 0.2% for the week as a rally in automakers and signs that the U.S. Federal Reserve will maintain low interest rates despite an expected surge in economic growth outweighed concerns about rising yields.
Automakers fell 1.6% after a strong run, ending with the sector’s best weekly performance since early February. The banks index tumbled 2.3%, posting the biggest declines among European sectors on Friday.
Lenders were particularly affected by downbeat sentiment spilling over from Wall Street after the Fed said it would not extend a temporary capital buffer relief put in place to ease a pandemic-driven stress in the funding market.
Europe’s biggest utility Enel rose 3.0% after it stuck to its targets for the year after beating earnings expectations.
German sportswear makers Adidas and Puma fell more than 2% each after Nike’s disappointing full-year revenue forecast.
Evolution Gaming gained 3.8% after Goldman Sachs started coverage of the Swedish casino games developer with a “buy” rating.
(Reporting by Sruthi Shankar and Devik Jain in Bengaluru; Editing by Arun Koyyur and Frances Kerry)
Source link