Published: August 14, 2020 at 5:27 AM ET
European equities fell sharply on Friday as the UK’s move to add France to its list of quarantined travel stocks and Chinese economic data disappointed.
Continued delays and concerns about a fresh round of U.S. stimulus also weighed on sentiment, and investors looked forward to a meeting of U.S. and Chinese officials to discuss their trading deal on Saturday.
The pan-European Stoxx 600
SXXP
index fell 1.8% in early trading, while the French CAC
PX1
glide 2.2%, and the German DAX
DAX
was 1.4% lower. The FTSE 100 of the United Kingdom
UKX
glide 2.4%, led lower by airline and hotel stocks. FS-stock futures
YM00
ES00
NQ00
also pointed lower.
The UK’s decision to add France and the Netherlands to its quarantine list amid emerging cases of coronavirus has hit travel and holiday stocks. From Saturday onwards, travelers coming from those countries in the UK will be required to allow 14 days of self-isolation. The latest blow to the travel sector saw airlines suffer early on Friday, with easyJet
EZJ
,
British Airways owner IAG
IAG
,
Deutsche Lufthansa
LHA
and Ryanair
RYA
all tumbling. Travel operator Tui
TUI
was set for a second day of substantial loss after disappointing earnings on Thursday.
It was not just airlines that suffered the consequences of a decision that was likely to lead to canceled flights and delayed vacations, such as hotel chains Whitbread
WTB
,
Intercontinental Hotels
IHG
,
and Rolls-Royce aircraft engine maker
RR
were also among the sharpest fallers.
Chinese retail sales fell unexpectedly 1.1% in July, improving on the 1.8% dip in June, but marking a seventh consecutive monthly decline. Economists had estimated sales 0.1% higher, but the surprising fall caused fears about China’s economic recovery. Industrial production grew, however, by 4.8% in July compared to the period back year, corresponding to the jump of 4.8% in June, but lacking the FactSet consensus of a 5.1% increase.
“China was first in the coronavirus crisis and probably one of the first to emerge from its initial phase, so the fragile nature of its recovery provides an uncomfortable view of the future for other countries,” said AJ Bell Investment Director Russ Mold.
Shares in focus
Daimler
DAI
shares fell after the owner of Mercedes-Benz said it had agreed to a $ 2.2 billion deposit to regulate civilian investigations by U.S. authorities and class action lawsuits over issues with diesel emissions.
.
