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European Stocks Slump on Growth Worries; Airbus Weakens

Stock MarketsSep 24, 2020 03:42AM ET
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© Reuters.

By Peter Nurse 

Investing.com - European stock markets traded sharply lower Thursday, with investors fretting a second wave of coronavirus cases during the northern hemisphere's coming winter will derail the economic recovery.

At 3:40 AM ET (0740 GMT), the DAX in Germany traded 0.6% lower, the CAC 40 in France fell 0.8% and the U.K.'s FTSE index was down 0.9%. 

France became the latest European country to tighten its restrictions on social gatherings late on Wednesday, against a backdrop of rising infections and admissions to hospital. The U.K. and Belgium had already announced new restrictions in the previous 48 hours. 

“The impact of second wave-related weakness does lead us to think that the recovery is under more pressure than previously thought,” wrote ING’s Bert Colijn, in a research note. “For governments and European Central Bank, this will be a wake-up call, if they needed one.”

These worries were backed up by comments from Fed Chairman Jerome Powell who reiterated the U.S. economy, the world’s driver, had a long way to go before recovery, and would likely require more support to get there. 

However, more fiscal support in the U.S. looks extremely unlikely before the November elections, as Congress now seems to be focusing on the battle to replace the late Ruth Bader Ginsburg on the Supreme Court.

Still, there was some good news Thursday as sentiment in the French manufacturing sector continued its steady recovery in September, rising to  96 in September compared with a revised figure of 92 in August.

This puts the focus firmly on the German Ifo Business Climate index to gauge the sentiment in Europe’s most important economy later Thursday, ahead of important weekly U.S. employment data.

In corporate news, Cineworld (LON:CINE) stock slumped over 17% after the cinema chain posted a first-half net loss of $1.64 billion, and warned that it may need to raise funds if a new wave of lockdowns were to occur.

Go-Ahead (LON:GOG) stock dropped 4.2% after the transport company swung to a loss in fiscal 2020, attributing the fall to GBP57.1 million of exceptional items related to the coronavirus.

Airbus (PA:AIR) dropped 2.3% following a Bloomberg report that Delta Air Lines (NYSE:DAL) is in talks with the European plane maker to delay the delivery of at least 40 aircraft.

Oil prices weakened Thursday despite official data showing crude inventories falling by 1.6 million barrels last week, on concerns the economic recovery in the United States, the world's biggest oil consumer, is slowing.

U.S. crude futures traded 0.8% lower at $39.62 a barrel, while the international benchmark Brent contract fell 0.7% to $41.48. 

Elsewhere, gold futures fell 0.3% to $1,862.05/oz, while EUR/USD traded up 0.1% at 1.1672, having hit a two-month low on Wednesday.

 

European Stocks Slump on Growth Worries; Airbus Weakens
 

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Chris Sundo
Chris Sundo Sep 24, 2020 5:28AM ET
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Really, they worry about growth just now? Whow. Must be some bunched up hunches.
 
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