European open: Shares rocked by France, Germany lockdown reports
European shares started the day firmly in the red as reports of impending coronavirus lockdowns in France and Germany spooked investors.
The pan-European Stoxx 600 index was down 2.65% at the open, with the German DAX sliding 3.49% and France’s CAC 40 3.66%.
French President Emmanuel Macron was scheduled to make a national address later on Wednesday with reports that he would lock down the country for a month.
In Germany, Chancellor Angela Merkel was reportedly proposing the closure of bars and restaurants for one month.
The UK’s the daily death total hit its worst levels since May, with calls increasing for the government to shift its current uncoordinated and much-criticised regional approach and impose a nationwide “circuit breaker” lockdown. The FTSE 100 was down 2%.
US futures also indicated more losses with the Dow set to open more than 400 points lower. Investors have all but given up hope of a pre-election stimulus package with the vote just a week away.
“As has been the case since March, investors’ concerns aren’t over the number of daily cases and deaths per se, but the severity of the restrictions that will greet each new leap and the crushing impact said measures will have on the global economy,” said Connor Campbell at Spreadex.
“Bags packed and gas tank full, investors fled the markets with the speed and panic of a family trying to escape a disaster scene.”
In equity news, travel and leisure stocks were under pressure, with British Airways owner IAG, InterContinental Hotels, Premier Inn owner Whitbread, Upper Crust owner SSP, pub chain Wetherspoons and travel company TUI all in the red.
Shares in French consulting and software development company Sopra Steria slumped 13% to top the losers board after reporting lower third quarter revenues due to weak business activity in the aeronautics sector.
Clothing retailer Next nudged higher as it lifted full-year profit guidance after a better-than-expected rise in third quarter sales. The company forecast a pre-tax profit of £365m, up £65m from a central scenario given in September.
Deutsche Bank shares fell, despite the company posting better-than-expected results driven by a strong performance for its investment bank.
Shares in sports goods manufacturer Puma fell after the retailer reported higher third-quarter profits and sales.
French car maker Peugeot fell 4% as the company posted a fall in third-quarter revenue fall and said it expected the European car market to drop 25% in 2020.
Delivery Hero and Ocado shares rose on the prospect of lockdowns and more people ordering takeaway food and groceries online.