Europe open: UK quarantine expansion, weak China data hits shares

European shares opened lower on Friday after travel stocks were hit by addition of France to Britain’s quarantine list and weak China data dampened broader sentiment.

The pan-European Stoxx 600 index was down 0.7% at 369.92 as all major bourses started the day in the red. Worries about a second Covid-19 wave in France sparked fears as the country put Paris and the major southern port city of Marseille on red alert.

China’s National Bureau of Statistics reported a 1.1% year-on-year fall in July retail sales, against expectations of a 0.1% rise, after a 1.8% decline in June. Retail sales have now fallen seven months in a row, denting hopes of a V-shaped recovery in the country when the pandemic originated.

Factory output was also weak, rising 4.8% compared with the year before, and below forecasts for a 5.1% rise.

"Retail sales growth in China hasn’t been the same since the country came out of lockdown at the end of February, though optimism over the July numbers had been increasing given recent positive data from the auto sector in July, as well as reports from the likes of Daimler, and Apple talking of some decent rebounds in their Chinese markets," said CMC Markets Michael Hewson.

He said Friday's negative reading showed Chinese consumers still remain "quite nervous about coming out of hibernation, with the last time we saw a positive reading being the end of last year, when we saw a gain of 8% for December".

Travel stocks dominated the losers board as Britain said it was adding France, the Netherlands, Malta and Monaco to its coronavirus quarantine list, joining Spain, another key destination for UK tourists.

Shares in Tui, easyJet, Ryanair, British Airways owner IAG and cruise line giant Carnival were all down sharply. French hotel group Accor was also off as the fear of fewer guests sent the shares lower.