Europe midday: Trump virus news unsettles investors

European stocks were lower at lunchtime on Friday on news that US President Donald Trump and his wife Melania had contracted Covid-19, increasing uncertainty for investors around the outcome of the election next month.

The pan-European Stoxx 600 index was down 0.59% as Dow Jones futures fell 448. All major bourses were lower on the news from Washington, which was confirmed by Trump on social media at 0600 BST.

"Investors are running for safety as there is exuberance of volatility. The gold price has shot above the $1,900 mark, and investors are favoring risk-off assets," said Naeem Aslam at Avatrade.

"The biggest question for investors and traders is how this situation is going to impact the Trump’s presidential campaign? If Trump feels well, and carries on with most of his campaign functions from the White House, the damage may not be that significant."

"Investors also wonder if the Joe Biden also has Covid-19 given the fact that Trump and Joe Biden had their first presidential debate this week...if Biden’s test also comes positive... investors will start to wonder if the U.S. election date will move as a result of this."

Investors were also concerned about the likelihood of a US coronavirus stimulus package being agreed now that Trump is in a 14-day quarantine.

AJ Bell investment director Russ Mould said: “One could view the market reaction as investors increasing the probability that Biden will win the election. His intention to raise taxes will not be good for corporate profits and therefore a negative for the stock market."

“Oil prices were also weak on Friday, two signals that suggest the latest decline in equity markets may not entirely be caused by Trump testing positive. This commodity is an economic bellwether and a decline in the price could be a red flag that the global economic recovery faces some near-term headwinds. Brent crude fell 2.5% to $39.92 per barrel."

Investors were also eyeing developments around Brexit talks, with the pound climbing on news that Prime Minister Boris Johnson would intervene in negotiations for the first time since June when he holds talks on Saturday with European Commission President Ursula von der Leyen in an effort to move towards a deal.

In corporate news, shares in Centamin topped the fallers board, down almost 18%. The company said it would reduce production guidance for the current year after ground movement forced an area of its Egyptian Sukari gold mine to be shut down.

The biggest gainer was Spanish engineering company ACS, up 19.8% on news it was in talks to sell its industrial division to French toll-road operator Vinci for about €5.2bn.1 billion). Vinci rose 3.8%.