By Peter Nurse
Investing.com – European stock markets sold off Monday, with sharp losses in the travel sector amid fears of a second Covid-19 wave in Europe.
The decision by the United Kingdom over the weekend to quarantine visitors from popular holiday destination Spain due to rising coronavirus cases there has hit the travel sector hard.
Travel operator Tui (DE:TUIGn) and easyJet (LON:EZJ) both fell over 13%, International Airlines Group (LON:ICAG) dropped nearly 10%, while Ryanair (LON:RYA), which also reported a large loss for the second quarter, fell 8%.
Worries about a second wave of the Covid-19 pandemic in Europe, and the damage this could cause not only to the Spanish tourist season, have overshadowed positive corporate news from China earlier Monday.
Earnings at China’s large industrial companies in June rose at the strongest pace since March last year, surging 11.5% from a year earlier in June, nearly doubling the 6.0% increase in May, the National Bureau of Statistics said Monday.
China is a vital export market for many European companies, and signs of a recovery there will boost optimism about the way forward for the region’s corporate sector, which returned to growth in July according to preliminary PMIs released on Friday.
Elsewhere, the German Ifo index complemented last week’s upbeat PMI message, rising slightly more than expected in July. .
Elsewhere, SAP (DE:SAPG) stock rose 2.7% after the German software company increased its operating profit and revenue in the second quarter, extending a run of improved performance since ditching its co-CEO model last year.
Royal KPN NV (AS:KPN) dropped 3.3% despite net profit rising 6.3% in the second quarter, with the Dutch telecommunications company citing lower restructuring costs and the sale of unit KPN Consulting.
“Market participants appear to be nervous in taking a strong view either way on the market, with plenty of uncertainty still clouding the outlook when it comes to demand,” said analysts at ING, in a research note.
Elsewhere, gold futures rose 1.7% to $1,929.50/oz, not far off the record high of $1,937.60 per ounce hit earlier Monday, surpassing a peak touched in September 2011, while EUR/USD traded at 1.1698, up 0.4%.
Stocks – Europe Lower; Travel Stocks Hit Hard by Virus Fears
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