Europe midday: Shares struggle for direction as US holiday subdues sentiment
European shares struggled for direction on Thursday as Covid-19 worries and the US Thanksgiving holiday subdued sentiment.
The pan-European STOXX 600 was flat after gains over the last four days. US markets have now closed for the Thanksgiving holiday with volumes and activity expected to be more subdued as a result.
German Chancellor Angela Merkel on Wednesday said restrictive measures imposed early this month to stymie a second coronavirus wave until at least December 20.
In the UK, Health Secretary Matt Hancock was due to set out plans in the Commons for the new tier system in England, with most of the nation expected to be placed in the two toughest tiers of Covid-19 restrictions from next Wednesday. London is expected to be put into tier two.
“Having posted new record highs earlier this week, US markets indulged in some pre-Thanksgiving profit taking yesterday after some weaker than expected economic data that suggested that the recent improvements in the labour market had more or less come to an end. It was notable however that the Nasdaq finished the day higher,” said CMC Markets analyst Michael Hewson.
“A rise in weekly jobless claims for the second week in succession to a one month high of 778k appears to have all the hallmarks of a US economy that is starting to rollover again after several months of modest improvements.”
In equity markets Repsol shares fell 4% as the Spanish energy company announced a €18.3bn four-year investment from 2021 to accelerate growth of low-carbon projects, become sustainable and boost shareholder return.
Bodycote was under the cosh after announcing another restructuring and saying it expects the civil aerospace market to remain near the current low levels for at least the next 18 months.
Entra shares were up as Swedish real estate company Castellum launched a NOR 30.8bn cash and shares takeover bid for the Norwegian peer, beating a rival offer from Sweden’s SBB.
Entra, Norway’s biggest listed real estate company, on Wednesday rejected Castellum’s initial approach saying it wanted to remain independent. It has now said it would evaluate the new bid.
Soft drinks maker Britvic was in the black after it reported a small rise in full-year pre-tax profit as lower costs helped to offset a revenue decline, as its out-of-home segment was dented by the Covid-19 crisis.