Bank, oil shares weigh on Europe as new virus wave fears grip investors

After a stunning recovery from March lows, the STOXX 600 has struggled to make headway in June as investors weigh the possibility of a swift return to economic growth against new virus cases and the chances of renewed restrictions. Lufthansa dropped 6.6% after CEO Carsten Spohr said the company would seek to avoid a grounding and insolvency in a battle with the airline's biggest shareholder over the terms of a 9-billion-euro bailout.


Reuters | Updated: 22-06-2020 14:16 IST | Created: 22-06-2020 14:08 IST
Bank, oil shares weigh on Europe as new virus wave fears grip investors

European shares slipped on Monday as signs of a resurgence in coronavirus cases in Germany and elsewhere unnerved investors who were hoping for a swift economic recovery from the crisis.

The pan-European STOXX 600 index was down 0.3%, pulling back from early losses of as much as 1%. Oil and gas companies and banks were a drag on the index, falling 1.4% and 0.9%, respectively.

Scandal-hit Wirecard shed another 32.2% as it said a quarter of its assets totalling 1.9 billion euros ($2.13 billion) that auditor EY had been unable to account for likely did not exist. The World Health Organization reported a record increase in global coronavirus cases on Sunday, while Germany's COVID-19 reproduction rate jumped to 2.88, a rate showing infections are rising above the level needed to contain the disease over the longer term.

"There remains a degree of concern that a rise in infection rates ... could well derail the prospects for a recovery as economies continue to try and re-open," said Michael Hewson, chief market analyst at CMC Markets. After a stunning recovery from March lows, the STOXX 600 has struggled to make headway in June as investors weigh the possibility of a swift return to economic growth against new virus cases and the chances of renewed restrictions.

Lufthansa dropped 6.6% after CEO Carsten Spohr said the company would seek to avoid a grounding and insolvency in a battle with the airline's biggest shareholder over the terms of a 9-billion-euro bailout. Telecom stocks were hit as Deutsche Telekom dropped 4% in ex-dividend trading.

However, automakers, retailers and miners gained about 0.5%, limiting losses. Fiat Chrysler rose 0.7% after news that the Italian government was close to unveiling the approval of guarantees for a 6.3 billion euro ($7 billion) financing of the automaker.

French group Mediawan shot up 41.2% as it announced the acquisition of Lagardere Studios valued at around 100 million euros ($112 million) as part of a broader expansion laid out by its founders.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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