Europe midday: Fears new lockdowns will stall recovery hits shares
European shares remained lower at midday on Tuesday after Germany confirmed an extended lockdown into Easter as it tried to combat the third wave of Covid-19 infections currently spreading across the Continent, sparking fears of a delay to economic recovery.
The pan-European Stoxx 600 index was down 0.6%, with all major regional bourses marking similar declines.
Germany extended its lockdown for three weeks, said Chancellor Angela Merkel after talks with regional leaders. Current measures would remain until April 18, with restrictions will be even tougher from April 1-5, when most shops will be shut and gatherings will be limited.
"Equity benchmarks in Europe are in the red due to worries that some countries will defer their reopening plans due to new coronavirus-related restrictions," said CMC Markets analyst David Madden.
"Rising Covid-19 case figures in a number of continental European countries has led to tougher measures being introduced in a bid to keep a lid on the virus. Stock markets enjoyed rallies in 2021, but much of those gains were due to hopes that governments would be easing up on restrictions in the months ahead, but there are fears that some countries will have to push back the reopening of their economies, hence the slide in equities."
Travel stocks slid on the news, exacerbating falls from Monday. Cruise line group Carnival was lower, along with airport and train station food outlet operator SSP, British Airways owner IAG, budget airlines easyJet and Ryanair.
Shares in Swedish truckmaker Volvo slumped 6.7% after the company warned a shortage of semiconductors would have a substantial impact on second quarter production.
Volvo on Monday night reported it would introduce “stop days” across its global truck manufacturing operations, as it struggled to obtain chips.