Stocks in Western Europe declined in trading on Friday amid growing investor concerns about the intensification of the second wave of the coronavirus pandemic in the region, which put pressure on tourism stocks.
The head of the European Department of the World Health Organization (WHO) Hans Kluge said at a press conference on Thursday that the current scale of the spread of coronavirus in Europe is cause for concern. “While the numbers reflect greater testing coverage, they also show an alarming rate of transmission in the region,” Western media quoted him as saying. At the same time, the WHO reported that they do not intend to change the recommendations for a 14-day quarantine for everyone who could be infected with COVID-19. At the same time, Kluge noted that although the concept of quarantine itself should be maintained, it should be “continuously adapted.”
Spain, among the countries hardest hit by the coronavirus, is also facing new outbreaks of the disease. The second wave of the spread of the infection deals another blow to the economy, which depends heavily on the tourism industry.
According to the forecast of the Bank of Spain, in 2022 the country's GDP may be more than 6% lower than before the crisis caused by the coronavirus pandemic.
Retail sales in the UK rose 0.8% in August from the previous month, according to data released on Friday. This is the lowest growth rate in the last four months. Analysts on average predicted an increase of 0.7%.
The composite index of the largest enterprises in the region Stoxx Europe 600 dropped by 0.66% and amounted to 368.78 points.
The British FTSE 100 indicator dropped 0.71%, the German DAX – 0.7%, the French CAC 40 – 1.22%. Italy's FTSE MIB and Spain's IBEX lost 1.09% and 2.21%, respectively.
On Friday, shares of companies in the tourism and aviation sectors fell. International Conslidated Airlines Group shares fell 14.6%, easyJet PLC – 9.2%, InterContinental Hotels Group PLC – 4.5%. The shares of the German Fraport AG, which also manages the Frankfurt airport, lost 5.2% in price.
CaixaBank SA shares dropped 2.2%, Bankia SA – 4.8%. As it became known on Friday, the heads of Spanish banks have approved the terms of their merger. As part of the agreement, Bankia will be taken over by the larger Caixa bank, with Bankia shareholders receiving 0.68 Caixa shares for each share they hold, according to a joint press release.
At the same time, the market value of Covestro AG climbed 5% amid a Bloomberg report citing sources that US-based Apollo Global Management Inc., an alternative investment management company, is considering a takeover of the German polymer materials manufacturer. Covestro declined to comment for the agency, and a source at Apollo was not immediately available, it said.
Euronext NV capitalization increased by 4.3%. London Stock Exchange (LON: LSE) Group Plc (LSEG), operator of the London Stock Exchange (LSE), announced on Friday that it is in exclusive negotiations with Euronext NV for the sale of Borsa Italiana. LSEG shares gained 1.3%.