Europe midday: Brexit, Covid worries keep shares muted

European shares were still muted on Tuesday’s as Covid-19 and the ongoing Brexit trade talks impasse dampened sentiment.

The pan-European Stoxx 600 index was down 0.53% with the UK’s FTSE 100 lower by a similar margin as British Prime Minister Boris Johnson prepared to travel to Brussels for talks with European Commission President Ursula von der Leyen. Dow Jones futures had extended morning losses to be off by 160 points.

US markets had closed lower overnight as the outgoing Trump administration moved to increase tension with Beijing with plans to sanction officials in response to new security laws in Hong Kong.

Concerns over a no-deal Brexit overshadowed news that the world’s first dose of the Pfizer/BioNtech coronavirus vaccine had been administered to 90-year-old British grandmother Margaret Keenan.

The pound also drifted lower on the prospect of the Brexit talks ending without agreement, and was down 0.3% against the dollar and 0.4% against the euro.

Investors were also fretting over news that Germany was looking to impose tougher restrictions on movement after a nationwide partial shutdown made little impact on the spread of the disease.

France was also considering a delay on unwinding some Covid lockdown restrictions next week amid signs the country will miss a coronavirus goal set by President Emmanuel Macron.

In equity news, shares in building equipment hire group Ashtead rose 4.8% as the company lifted full year guidance and held its dividend after a strong second quarter prevented a bigger fall in interim profits.

SSE and National Grid rose as regulator Ofgem said it would cut the amount of money that energy networks can give to shareholders by less than initially set out. The energy regulator said companies would be allowed to pay a return on equity of 4.3%, up from a previous 3.95%.

Plumbing and heating products supplier Ferguson gained after it reported a rise in first-quarter core earnings and revenue, driven by a strong performance in the US and Canada.