Europe midday: Shares turn lower as Austria announces Covid lockdown
European shares slid off morning highs as rising Covid case numbers and lockdowns in the region dampened sentiment.
The pan-European Stoxx 600 index was down 0.10% at midday. All major regional bourses followed suit.
In the UK, retail sales increased 0.8% month-on-month in October, slightly exceeding the 0.5% expected by economists. Excluding fuel, sales grew by 1.6% on the month against a 0.6% forecast, as the country faced a spike in energy prices.
Elsewhere on the Continent, Austria said it would impose a full national lockdown from Monday as case numbers started to rise. The news hit airlines looking for a boost in passenger numbers over the coming holiday period with British Airways owner IAG, easyJet and Lufthansa all flying lower.
German Chancellor Angela Merkel announced restrictions on for the unvaccinated as a "very worrying" fourth wave of Covid-19 hit the country. Health Minister Jens Spahn said the coronavirus situation in the country was so grave that a lockdown, including for people who have been vaccinated, cannot be ruled out.
"With Austrian cases surging over 400% in the last month alone, they do stand out as a particularly bad case when set against many of their European peers," said IG analyst Joshua Mahony.
"However, with Covid cases turning upwards across the likes of Germany, France, and Portugal, there is a fear that today’s announcement is indicative of where other European nations could find themselves in 2-3 weeks' time. Energy markets have taken a hit off the back of the Austrian lockdown announcement, with the demand outlook undoubtedly worth adjusting if we see a fresh bout of lockdowns."
In equity news, UK online grocery delivery service and warehouse system designer Ocado topped the Stoxx after a Deutsche Bank note suggested 50% shareholder Marks & Spencer could be mulling a potential buyout.
“Cash flow is no longer being squandered on an unsustainable dividend but saved to recover the investment grade credit rating that may be required to buy out Ocado,” DB said in a research note.
Anglo-French home improvement retailer Kingfisher fell 4% as it posted a 2.4% slide in third-quarter sales but said the final quarter of the year was off to a strong start.
Polish parcel locker company InPost also gained after two successive sessions of steep declines.
French luxury group Hermes was up after talks that it may be added to the Eurostoxx 50 index during a December review.