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European stocks fall as German consumer morale weakens, virus cases spike

Stock Markets Oct 22, 2020 05:15AM ET
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© Reuters. The German share price index DAX graph at the stock exchange in Frankfurt

By Sruthi Shankar

(Reuters) - European stocks hit their lowest level in almost a month on Thursday, as a fall in German consumer morale, worries about soaring coronavirus cases in the continent and a U.S. stimulus impasse weighed on sentiment.

The German DAX (GDAXI) fell 0.9% and lagged its European peers, as a survey showed consumer morale in Europe's largest economy dropped heading into November.

The pan-European STOXX 600 (STOXX) was down 0.7%, after falling as much as 1.2% to hit its lowest since Sept. 25.

COVID-19 cases have climbed in Europe, with Spain becoming the first Western European nation to exceed 1 million infections and Italy setting a record increase in daily cases.

The number of confirmed cases in Germany jumped by more than 10,000 in a single day for the first time.

"We are more cautious on Q4 growth than we were a few weeks ago," said Julien Seetharamdoo, head of European market investment strategy at Zurich Insurance Group (OTC:ZFSVF).

"We don't expect anything like Q2, but it's more likely that Q4 will be close to stagnation in terms of growth as restrictions impact activity in certain parts, especially the services sector."

The broader selloff took a toll on tech stocks (SX8P), the worst performing sector so far this week. Investors have also remained nervous about the slow pace of U.S. stimulus and the Brexit negotiations.

Data showed fund flows into European stocks have surged in recent months as global investors looked away from U.S. equities ahead of the presidential election and on concerns over high valuations.

UK's FTSE 100 (FTSE) hit a five-month low, with British Airways-owner IAG (L:ICAG) sliding 3% after it further downgraded its capacity outlook for 2020. (L)

Third-quarter earnings, however, continue to be largely better than expected.

French electrical equipment group Schneider Electric SE (PA:SCHN) rose 3%, giving the biggest boost to STOXX 600, after it raised its 2020 revenue and margin forecasts.

Unilever (L:ULVR), (AS:UNA) rose 1.2% after the Anglo-Dutch consumer group reported a stronger-than-expected return to quarterly sales growth, led by emerging markets.

Swedish hygiene products group Essity (ST:ESSITYa) fell 4.6% as quarterly sales suffered from the stay-at-home trend.

European stocks fall as German consumer morale weakens, virus cases spike
 

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Comments (2)
Julie Cruise
Julie Cruise Oct 22, 2020 4:55AM ET
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this won't be remembered as the biggest pandemic of the century, but the start of the first infowar. Infowar I.
perplexed76 .
perplexed76 . Oct 22, 2020 4:22AM ET
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hope is rising with every hour...
 
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