Europe open: Shares open lower on renewed inflation worries, Delta cases
European shares fell in early trade on Wednesday as worries about rising inflation resurfaced and increase in Covid-19 Delta variant cases also dampened sentiment.
The pan-European STOXX 600 was down 0.14% with all regional bourses in the red. Investors were eyeing German unemployment figures and euro zone inflation data due later in the day.
In the UK, official data revealed the economy contracted a touch more than initially estimated in the first quarter as households saved more during the third national lockdown, according to figures released on Wednesday by the Office for National Statistics.
Gross domestic product fell 1.6% between January and March, compared to an initial estimate of a 1.5% decline. That leaves GDP 8.8% below pre-pandemic levels, revised from a first estimate 8.7%.
The household saving ratio rose to 19.9% from 16.1% in the fourth quarter of 2020, hitting its second-highest level on record after a 25.9% surge in the second quarter of last year.
Travel stocks were all in the red as Delta variant cases globally started to rise, threatening any hopes of a recovery in the leisure and airline sector this summer. EU states are also imposing greater restrictions on travellers from the UK, which is seeing severe spikes in daily cases.
Among the stocks affected were travel firm TUI, cruise line operator Carnival, Frankfurt airport owner Fraport, Aeroports de Paris and Deutsche Lufthansa.
The European Commission on Tuesday announced that it had begun an in-depth study of British Airways parent IAG’s planned takeover of Spain’s Air Europa. IAG shares were 1.15% lower on the news.
In other company news, Dutch eyewear store operator Grandvision surged as Ray-Ban maker EssilorLuxottica said it had decided to go ahead with a planned takeover of the company. EssilorLuxottica’s shares were up 1.3%.