Europe open: Stocks drop amid Covid-19 concerns, geopolitics

Stocks in Europe are again moving lower, weighed down by the ongoing headlines around the Covid-19 pandemic, especially in the US.

Also dampening sentiment was a Bloomberg report that US officials had discussed the possibility of punishing banks in Hong Kong, and HSBC specifically, including by destabilising the financial centre's peg to the US dollar.

Nonetheless, that same report said that disrupting the dollar peg had not regained "serious traction", with other proposals including cancelling a US-Hong Kong extradition treaty or ending cooperation with Hong Kong police.

As of 1030 BST, the benchmark Stoxx 600 was down by 0.81% at 365.96, alongside a 0.84% drop for the German Dax to 12,513.69 while the Cac-40 was off by 1.21% to 4,983.79.

To take note of, in the background gold futures were trading above the $1,800/oz. for the first time in almost a decade.

On that note, IG's Josh Mahony said: "The six-week lockdown in Melbourne does ring alarm-bells for traders, as it gives us an insight into the kind of time-frame these localised lockdowns will be dealing with. Gold is the main benefactor of late [...]

"In an age of global monetary and fiscal expansion, it comes as no surprise to see traders reach for fiat assets such as gold to stave off the potential devaluation that comes with swelling central bank balance sheets."

HSBC was a top faller, with its shares dropping by over 3%.

Nokia was a big loser, with its shares slumping by 7% after analysts at JP Morgan downgraded their recommendation for the shares from 'overweight' to 'neutral', citing the risk that it US carrier Verizon would reduce its reliance on Nokia as primary supplier of radio access network.

Electrolux was heading the other way after the home appliance maker said its second quarter operating loss would be smaller than feared.