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European Stocks Flat, Miners Offset Losses in Travel Sector

(Reuters) - European shares were trading flat on Monday as China-exposed miners gained on fresh stimulus for the world’s second-largest economy, but growing risks from an uptick in coronavirus cases in the continent weighed on sentiment.

Travel stocks fell 0.7%, continuing to slide after the United Kingdom added France and other countries to its quarantine list last week. The pan-European STOXX 600 index was unchanged after opening slightly higher.

Shares in European tour operator TUI, cruise operator Carnival Plc and British Airways-owner IAG fell between 3% and 4%.

Germany declared nearly all of Spain, including the tourist island of Mallorca, a coronavirus risk region following a spike in cases there, while Britain on Sunday marked a sixth day of more than 1,000 jump in daily virus cases.

“The trend of growing European new infections looks unlikely to abate for now and could continue to weigh on sentiment,” analysts at Commerzbank wrote in a note.

“We expect travel & leisure to be one of the last sectors to recover from the pandemic,” they said, adding that travel curbs remain a big potential driver of default risks for the sector.

Meanwhile, European miners .SXPP jumped 1.0% after equity markets in China, the world’s top metals consumer, were boosted by fresh central bank stimulus. 

Chipmakers also rose, while luxury group LVMH gained 0.4% after Jefferies upgraded to “buy” and spirits maker Pernod Ricard added 1.7% after a Barclays upgrade to “overweight.”

Markets appeared to be in a holding pattern ahead of the release of August business activity data later this week, which could shed light on the pace of economic recovery, while the U.S. Federal Reserve’s policy minutes is also due on Wednesday.

France’s Sanofi slipped 0.4% after it agreed to buy U.S. company Principia Biopharma Inc for around $3.7 billion.

Frankfurt-listed shares of Novavax jumped 6.4% after the U.S. drugmaker said it was starting a mid-stage study of its experimental COVID-19 vaccine in South Africa.

Meat processor Cranswick Plc gained 6.6% as eating in during lockdowns helped its revenue surge 25% in the first quarter.

Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur


Source: Reuters


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