By Barbara Kollmeyer
European stocks tumbled on Monday, tracking losses across global equities, as investors faced worries over surging COVID-19 cases and restrictions to combat them, alongside concerns a key U.S. spending bill was in trouble.
“With record COVID cases in the U.K. in the past few days, and new restrictions being implemented across Europe, it almost feels like an action replay of 12 months ago, with some scientists in the U.K. calling for a fresh lockdown before Christmas, in a move that is likely to be as welcome as toothache,” said Michael Hewson, chief market analyst at CMC Markets.
The Stoxx Europe 600 index (STOXX:XX:SXXP) was down 1.4% to 467, after finishing last week with a 0.4% drop. The German DAX (XEX:DX:DAX) was down 1.8%, the French CAC (PAR:FR:PX1) was down 1% and the FTSE 100 index (FTSE:UK:UKX) was off 1%. The euro (XTUP:EURUSD) was an outperformer, up 0.5% against the dollar and British pound (XTUP:EURGBP) .
The Turkish lira (XTUP:USDTRY) sunk to new depths against the dollar after President Recep Tayyip Erdoğan on Sunday reiterated the country’s need to keep cutting interest rates .
the Netherlands entered a nationwide lockdown on Sunday evening, with schools, universities, and all nonessential stores, bars and restaurants closed until Jan. 14, as France and Austria tightened up travel restrictions, and Ireland imposed an 8 p.m. curfew for pubs, bars and indoor and outdoor entertainment events. Governments in Spain and Italy will also be meeting this week to consider new measures.
The U.K. reported 82,886 more lab-confirmed COVID-19 cases on Sunday, and officials have said new restrictions before Christmas couldn’t be ruled out. The British Medical Association warning that almost 50,000 doctors, nurses and other National Health Service staff in England could be off sick by Christmas Day barring further measures.
Europe also tracked losses for U.S. stock-index future s (CME:ES00) (CME:NQ00) (CBT:YM00) , which fell on COVID concerns and worries that President Joe Biden’s key $2 trillion spending bill was in trouble after Sen. Joe Manchin (D-W.Va.), said on Sunday that he couldn’t support it . That development prompted Goldman Sachs to cut its 2022 U.S. growth forecasts.
Almost every stock sector was in the red, with apparel, banks, technology and pharmaceutical sectors leading the declines.
Novo Nordisk (NYS:NVO) shares slumped 10% after the Danish pharmaceutical group said it can’t meet demand for its new weight-loss drug because of U.S. supply issues.
Novartis (NYS:NVS) (SWX:CH:NOVN) fell 1.4%. The Swiss pharma major said Monday that is has signed an option, collaboration and license agreement with BeiGene for the development of an immunotherapy cancer treatment for up to $1 billion. Under terms of the deal, it will make a $300 million upfront payment to add a drug to its pipeline.
Among the heavyweights, chip group ASML Holding fell 2%, German business software group SAP (NYS:SAP) (ETR:XE:SAP) fell over 2%.
Also weighing on indexes, were losses for energy names, as U.S. (NYM:CL00) and global benchmark Brent crude prices fell more than 3% each. Shares of TotalEnergies (PAR:FR:TTE) (NYS:TTE) , BP (NYS:BP) (LON:UK:BP) and Royal Dutch Shell shares fell around 3% each.
Bucking the downward direction, shares of BNP Paribas (PAR:FR:BNP) rose 0.7%, after the French bank said it would sell its U.S. unit, Bank of the West, to Bank of Montreal for $16.3 billion in cash . As a result, BNP said it would see a one-off capital gain, net of taxes, of about 2.9 billion euros ($3.26 billion), and boost its common equity Tier 1 ratio by 170 basis points.