Europe open: Shares make lacklustre start as Covid surge worries investors
European shares were mixed in early Friday trade as nervous investors eyed the rising number of coronavirus cases across the continent, sparking fears of renewed lockdowns.
The pan-European Stoxx 600 index was flat at the start of the final session of the week with Spain’s Ibex and London’s FTSE 100 both in marginal positive territory despite a surge in Covid-19 cases in both countries.
Madrid has recorded high hospitalisation rates and the UK reported the highest number of new coronavirus cases in a single day since the pandemic began.
France's CAC40 fell after the country also set a new record of daily infections and the Prime Minister Jean Castex warned on Thursday that the government could be forced to reconfine areas.
UK airline, retail, and hospitality stocks were all under pressure as the government imposed minor new restrictions, with concern rising that tougher measures may have to be introduced to stymie the spread of the virus. Finance Minister Rishi Sunak announced new stimulus measures on Thursday to protect what he called "viable" jobs.
“Unemployment is a ticking time-bomb. (Sunak’s) job-saving programme cannot save the U.K. from facing a higher unemployment rate, and this increase in the unemployment rate is going to have an adverse effect on the economy. Hence, sterling's upside is really limited, especially taking into consideration that the Brexit deadline is just around the corner, with no deal in place,” said Naeem Aslam, Chief Market Analyst at Avatrade.
In corporate news travel stocks were under the cosh, with Ryanair, easyJet, Lufthansa and Frankfurt airport operator Fraport all lower. SSP, which runs restaurants and cafes at airports and train stations, was also in decline after poor numbers this week, and French hotel group Accor also declined.
Shares in Spanish telephone operator MasMovil rose after reports that Vodafone had started talks to buy the company. Vodafone was also higher on the news.