Europe open: Shares muted on India Covid strain worries, China data
European shares made a nervous start to the week, as wary investors watched the latest stage of Britain’s path out of the Covid-19 pandemic, tempered by rising cases of the India variant.
The pan-European Stoxx 600 index was flat at the opening, with regional bourses mixed. The muted start wasn’t helped by data from China indicating a slowing economic recovery in the country.
Fixed asset investment fell from 25.6% to 19.9% month-on-month, while industrial production dropped from 14.1% to 9.8%. Retail sales almost halved, from 34.2% to 17.7%, far worse than the 25.0% forecast.
Britain’s economy reopened on Monday, after a four-month national lockdown. The country’s FTSE 100 index was flat as traders fretted about the threat to further restriction easing on June 21 from the new India strain and the government's refusal to ban flights to and from the country.
“It’s a big day for many businesses as the UK lifts more Covid-related restrictions. This should have been cause for celebration, but all eyes are on the Indian variant and whether the government is going to impose new lockdowns, be it localised or national,” said Russ Mould, investment director at AJ Bell.
In equity news, shares in Diploma topped the Stoxx as the company said it expected annual results to be "significantly ahead" of expectations as the technical equipment supplier reported an increase in first-half profit and said momentum had increased since then.
Irish budget airline Ryanair rose 2% despite reporting a record annual after-tax loss as it said there were signs the recovery had begun with weekly bookings on the rise.
“Airlines are also at a major turning point today as restrictions ease slightly. They are doing everything they can to cater for demand within the still-tight rules and Ryanair implies that customer appetite for travelling is picking up, judging by its bookings since April,” said AJ Bell’s Mould.
However, the news did not go down well in the travel sector, with rival airline easyJet lower, along with Trainline, SSP Group, Aeroports de Paris and Fraport. Airbus and engine maker Rolls-Royce were also weaker
Housebuilder Vistry rose after the firm lifted its full-year profit expectations on Monday as it highlighted "strong" demand.
German chemical group Bayer fell after a US federal appeals court upheld a $25m judgment and trial verdict finding the company’s Roundup caused a California resident’s non-Hodgkin lymphoma.