Published: August 14, 2020 at 05.00 ET
European stocks fell sharply on Friday as the UK’s move to add France to its quarantine list hammered the travel stock and Chinese economic data disappointed.
Continued delays and concerns over a new round of US stimulus also dampened sentiment, with investors looking forward to a meeting with US and Chinese officials to discuss their trade deal on Saturday.
The pan-European Stoxx 600
index fell 1.8% in early trading, while the French CAC
slipped 2.2%, and the German DAX
slipped 2.4%, led lower by aviation and hotel stocks. US stock futures
also pointed lower.
The United Kingdom’s decision to add France and the Netherlands to its quarantine list amid growing cases of coronavirus affected travel and leisure stocks. From Saturday, travelers arriving in the UK from these countries must self-isolate for 14 days. The latest blow to the travel sector, the airlines suffered heavy losses early on Friday with easyJet
British Airways owns IAG
all tumble. Tour operator Tui
was put to another day with significant losses after disappointing earnings on Thursday.
It was not just the airlines that felt the impact of a decision likely to lead to canceled flights and postponed holidays, as hotel chains Whitbread
and aircraft manufacturer Rolls-Royce
was also among the sharpest fallers.
Chinese retail sales fell unexpectedly by 1.1% in July, improving by 1.8% in June, but marking a seventh consecutive monthly decline. Economists had estimated that sales would be 0.1% higher, but the surprising fall raised fears of China’s economic recovery. However, industrial production continued to grow, rising 4.8% in July from the previous year, equivalent to a 4.8% jump in June, but lacking the FactSet consensus of a 5.1% increase.
“China was first in the coronavirus crisis and it is without a doubt one of the first to come out of its first phase, so the fragile nature of its recovery offers an uncomfortable view of the future of other countries,” said Investment Director AJ Bell, Russ Mold.
Shares in focus
shares fell after the Mercedes-Benz owner said it had agreed on a $ 2.2 billion settlement to conduct civilian investigations by U.S. authorities and lawsuits regarding diesel emissions.