European Markets Retreat as Coronavirus spike weighs on Sentiment; UK Economy posts weak May Rebound

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  • On Monday, World Health Organization Director-General Tedros Adhanom Ghebreyesus warned that “too many countries are headed in the wrong direction.”
  • U.K. GDP (gross domestic product) expanded by 1.8% in May following April’s historic 20.4% contraction. Economists polled by Reuters had expected a monthly rebound of 5.5%.

European stocks pulled back on Tuesday as a spike in coronavirus cases started to weigh on global market sentiment.

TICKER COMPANY NAME PRICE CHANGE %CHANGE VOLUME 
.FTSEFTSE 100FTSE6155.47-20.72-0.34151565767
.GDAXIDAXDAX12626.62-173.35-1.3519394022
.FCHICAC 40 IndexCAC4978.16-78.07-1.5419680491

The pan-European Stoxx 600 dropped 1.5% in early trade, with tech stocks shedding 3% to lead losses as all sectors and major bourses slid into negative territory.

European markets are following their global counterparts lower Tuesday as virus cases spike in a number of countries around the world. On Monday, World Health Organization Director-General Tedros Adhanom Ghebreyesus warned that “too many countries are headed in the wrong direction.”

“In several countries across the world, we are now seeing dangerous increases in Covid-19 cases, and hospital wards filling up again,” Tedros said. “It would appear that many countries are losing gains made as proven measures to reduce risk are not implemented or followed.”

Meanwhile, stocks in Asia Pacific fell in Tuesday morning trade, as China’s yuan-denominated trade data for June was released, with exports rising 4.3% year on year while imports increased 6.2% as compared to a year earlier, according to customs data. The data was being watched for clues on China’s economic recovery following the imposition of lockdowns earlier in the year to curb the spread of the coronavirus.

U.S. earnings are also a key focus for investors. Later on Tuesday stateside, some of the largest banks in the U.S. such as Citigroup and JPMorgan Chase are set to report their earnings. U.S. stock futures moved higher in overnight trading and pointed to gains at the open on Tuesday.

In Europe Tuesday, official figures revealed that U.K. GDP (gross domestic product) expanded by 1.8% in May following April’s historic 20.4% contraction. Economists polled by Reuters had expected a monthly rebound of 5.5%.

In terms of individual share price action, British safety equipment manufacturer Halma slid 5.4% to the bottom of the Stoxx 600 after warning that full-year profits will be lower than previous guidance.

At the top of the European blue chip index, Swedish tech company Hexagon climbed 5%.

SOURCE: CNBC

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