It was a bearish end to the week for the European majors on Friday, with the DAX30 sliding by 1.44% to lead the way down. The CAC40 and the EuroStoxx600 weren’t far behind, with losses of 1.22% and 1.01% respectively.
A continued spike in new COVID-19 cases and low vaccination rates across the Eurozone weighed on the European majors.
In the week, there was also a jump in new COVID-19 cases in China that added to the market angst late in the week.
For the EU, fewer doses from Pfizer Inc. and EMA’s pending review of the AstraZeneca vaccine means that vaccination rates will likely remain low in the month.
This is then expected to lead to a delay in the easing of lockdown measures and to any start of any sustainable economic recovery.
The pick-up in China was a marked contrast to the U.S. and Europe, where the spread of coronavirus has scarred consumer spending, underlined by dismal U.S. retail sales reported on Friday.
Also evident are doubts about how much of U.S. President-elect Joe Biden’s stimulus package will make it through Congress given Republican opposition, and the risk of more mob violence at his inauguration on Wednesday.
“The data bring into question the durability of the recent move higher in bond yields and the rise in inflation compensation,” said analysts at ANZ in a note.
“There’s a lot of good news around vaccines and stimulus priced into equities, but optimism is being challenged by the reality of the tough few months ahead,” they warned. “The risk across Europe is that lockdowns will be extended, and U.S. cases could lift sharply as the UK COVID variant spreads.”
The pan-European Stoxx 50 climbed down by 1.15% to 3,599.55 . In the cash markets, the DAX futures Germany was trading 1.44% down at 13787.73. CAC 40 futures in France climbed down by 1.22% to 5611.69, while the FTSE 100 futures in the U.K. fell by 0.97% to 6,735.71 ,at the time of writing.
EURO STOXX 50