Latest News

European Stocks Lower; Travel Sector Slumps on New Virus Variant

Stock Markets55 minutes ago (Nov 26, 2021 08:42)

© Reuters

By Peter Nurse – European stock markets slumped Friday, with the travel sector hit hard, on concerns a new Covid variant will prompt fresh mobility restrictions, hindering the region’s economic recovery.

At 3:20 AM ET (0820 GMT), the DAX in Germany traded 3.6% lower, the CAC 40 in France also fell 4.4% and the U.K.’s FTSE 100 dropped 3.4%.

Virus cases have soared in Europe in the last month, with a number of countries introducing stricter Covid measures. But a degree of urgency was added to the situation by the announcement late Thursday by the World Health Organization that it’s monitoring a new Covid-19 variant with “a large number of mutations”, detected mainly in southern Africa.

The United Nations agency is set to hold a special meeting later Friday to discuss the implications for vaccines and treatments given the degree of mutation from the original strain. Ahead of that, the U.K. has already announced a temporary flight ban from a number of southern African countries and put travelers from the region into quarantine.

This news knocked the region’s travel sector very hard, with a number of the airline stocks falling to their lows for the year. Lufthansa (DE:LHAG) stock fell 12%, Ryanair (LON:RYA) stock slumped 13%, easyJet (LON:EZJ) stock fell 16%, as did the stock of IAG (LON:ICAG), the owner of British Airways. Travel agency Tui (DE:TUIGn) also weakened dramatically, with its stock falling 10%.

“We still don’t know how infectious the virus is … it’s a general uncertainty. Markets are anticipating the risk here of another global wave of infections if vaccines are ineffective,” Reuters reported Moh Siong Sim, an analyst with the Bank of Singapore, as saying. “Reopening hopes could be dashed.”

Elsewhere, Telecom Italia (MI:TLIT) stock rose 1.5%, bucking the overall negative tone, after Bloomberg reported that private equity giants KKR and CVC are considering joining together on a bid for the Italian telecommunications giant.

KKR indicated its interest last weekend, but Vivendi (OTC:VIVHY), Telecom Italia’s largest shareholder, dismissed the offer as not representing value.

Wall Street was closed Thursday for Thanksgiving, and will close early on Friday in a shortened session. Ahead of that U.S. stock futures point to a sharply lower open, with the Dow Jones Industrial Average contract over 600 points lower.

Crude prices slumped Friday as the announcement of a new Covid-19 strain raised concerns about demand just as a U.S.-led coalition of major consumers is adding output to the global supply.

Worries are growing that this will result in a global supply surplus in the first quarter, and brings next week’s meeting of the Organization of the Petroleum Exporting Countries, Russia and allies, a group known as OPEC+, firmly into focus

The group is to decide whether it will continue raising output by 400,000 barrels per day in January, or to hold back supply.

By 3:20 AM ET, U.S. crude futures traded 5.7% lower at $73.95 a barrel, while the Brent contract fell 4.7% to $78.35.

Additionally, gold futures rose 1.4% to $1,808.80/oz, while EUR/USD traded 0.5% higher at 1.1267.

European Stocks Lower; Travel Sector Slumps on New Virus Variant

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

You may also like

Leave a reply

Your email address will not be published.

More in Latest News