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European Stocks Declined Due to the New Wave of Coronavirus

The COVID-19 remains one of the most serious issues for more than a year. Interestingly, European stocks dropped from a one-year peak on Tuesday. People should keep in mind that, a new wave of coronavirus infection, as well as a fresh lockdown in Germany, raised fears of a slow economic recovery from the pandemic. Unfortunately, the pandemic is not over yet and it is not surprising that a new wave of infection created challenges.

It is worth mentioning that the pan-European STOXX 600 index declined 0.2% after a new round of sanctions aimed at China affected Asian markets.

Interestingly, Germany’s DAX was flat after Chancellor Angela Merkel’s decision. She decided to extend a lockdown until April 18. Moreover, Merkel asked citizens to stay at home for five days over the Easter holidays.

It was not an easy day for Swedish truckmaker Volvo. It dropped 7.0% after Volvo warned a shortage of semiconductors would have a substantial impact on production in the second quarter. Importantly, its stock weighed on Europe’s industrial goods and services sector. Moreover, automakers fell 2.7% to give back some of their recent gains.

European stocks and risk factors

As mentioned earlier the pandemic continues to dominate the headlines. The European stocks suffered losses due to the problems caused by the pandemic. Fears of another wave of the virus in mainland Europe triggered concerns that several countries in the region will have to reopen their economies later than anticipated.

Interestingly, the STOXX 600 last week reached its highest point since February. The STOXX 600 regained most of the pandemic-driven losses on hopes that vaccination drives and stimulus will spur a strong rebound.

However, the gains slowed this week amid worries about a surge in COVID-19 cases. As a reminder, the tally of new cases in France accelerated despite the start of a third lockdown. Moreover, Austria postponed the reopening of cafes and restaurants.

Interestingly, travel & leisure stocks fell again, with British Airways owner IAG, easyJet, and travel company TUI down between 2.6% and 6%.

Let’s have a look at the Swiss online pharmacy chain Zur Rose. It surged at the top of STOXX 600 after Morgan Stanley started coverage with an “overweight” rating.

It is no secret that the pandemic created numerous challenges. Unfortunately, it won’t be easy to solve all of them in a short period of time. Governments should join forces with companies, and experts to improve the situation.

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