By Barbara Kollmeyer
European stock markets fell on Friday, as the region’s soaring coronavirus pandemic cases weighed on sentiment, and investors wound down what is set to be the worst week for trading since June.
The Stoxx Europe 600 (STOXX:XX:SXXP) dropped 0.8% to 353.55, after closing down 1% on Thursday. The index is set for a 4.1% weekly drop with one session left to trade, and that would mark its worst weekly performance since the week ending June 12, according to FactSet. The German DAX (XEX:DX:DAX) and French CAC (PAR:FR:PX1) indexes fell 1.4% each and the FTSE 100 (FTSE:UK:UKX) slipped 0.3%.
U.S. stocks finished a turbulent session on Thursday with modest gains. Stock futures (NAS:SP) (DOW:DJIA) (NASDAQ:COMP) were weaker ahead of durable goods data. Investors have been watching a last-ditch $2 trillion stimulus-package effort by the Democrats.
Europe is seeped in worries that rising coronavirus cases and fresh restrictions will hamper the early seeds of an economic recovery, which has helped drive investors to the region. Governments in the U.K. and France have introduced new measures to battle climbing cases, while Spain is struggling with a massive outbreak in its Madrid region.
Investors “have every right to be worried about the coronavirus stock market rally, which is under a great threat. The airline, retail, and hospitality sectors are the ones to keep an eye on as investors continue to question their future,” said Naeem Aslam, chief market analyst at AvaTrade.
Meanwhile, the lack of a U.S. stimulus bill ahead of the November presidential election has acted as weight on sentiment globally.
“Given the continued political impasse, we think that the odds of a passage of the fiscal package has now fallen below 20%. If an agreement is not reached by the end of September, it will almost certainly not happen until next year,” said Bénédicte Lowe, cross asset strategist at BNP Paribas London, in a note to clients.
Drugmakers were among the worst performers, with shares of AstraZeneca (NAS:AZN) (LON:UK:AZN) , Sanofi (PAR:FR:SAN) and Novo Nordisk (CSE:DK:NOVO.B) (NYS:NVO) all down around 1% or more.
Banks were also under pressure, with the Stoxx Europe 600 Banks Index (STOXX:XX:SX7P) down 7% and in the grips of the fourth-straight losing session. Shares of heavily weighed BNP Paribas and UBS Group fell 2% each, while Crédit Agricole lose more than 3%.
Airlines were again under pressure, with shares of British Airways operator International Consolidated Airlines (LON:UK:IAG) dropping 4%, and Deutsche Lufthansa (FRA:DE:LHAB) and Ryanair Holdings down 2% each.
Technology names were also under pressure, with Infineon Technologies (ETR:XE:IFX) down 3%, while heavyweights SAP (ETR:XE:SAP) and ASML Holding (NAS:ASML) fell 2% each.