Register now for FREE and unlimited access to reuters.com
November 23 (Reuters) – European stocks fell to a three-week low on Tuesday, recording their worst session in nearly two months, as a resurgence in COVID-19 cases raised fears of tightening restrictions, while energy stocks and miners rose on rising commodity prices.
The pan-European STOXX 600 (.STOXX) lost 1.3%, with only the oil and gas (.SXEP) and basic resources (.SXPP) sectors trading higher. Energy stocks were boosted by rising oil prices after a US decision to dip into emergency reserves.
Miners also rose, with analysts pointing to improving economic trends in Asia providing a boost.
“It looks rather disastrous today in Europe. But we see that raw materials, especially miners, are doing very well. Any action capable of turning to Asia, where for the moment these economies and the consumer confidence seems to be going the other way, doing a lot better, ”said Danni Hewson, financial analyst at AJ Bell.
Tech stocks in Europe (.SX8P) fell 3.4%, marking their largest single-day percentage decline in two months, as the outlook for rising interest rates rocked the sector’s attractiveness to high increase.
US President Joe Biden on Monday called on Jerome Powell to continue chairing the Federal Reserve, lifting bets on US rate hikes in 2022. Money market traders have now fully integrated the price of a rate hike. 10 basis points by the European Central Bank in December 2022, up from 50% odds on Monday.
Growing nerves around a fourth wave of COVID-19 infections that are blocking European recovery at a time when central banks anticipate the withdrawal of monetary support have also pulled investors out of stocks.
The Euro STOXX 50 volatility index (.V2TX), the main indicator of stock market anxiety in Europe, reached its highest level in nearly seven weeks.
One-off events or corporate-related headlines, like with Telecom Italia yesterday, cannot last too long, or overshadow concerns about increasing COVID cases, new lockdowns and growing economies Europeans, “said Charalambos Pissouros, head of research at the JFD group.
Travel stocks (.SXTP) fell 1.8% after the United States issued an advisory against travel to Germany and Denmark due to the increase in COVID-19 cases in that country . Read more
Thyssenkrupp (TKAG.DE) fell 6.1% after Swedish activist fund Cevian nearly halved its stake in the German conglomerate. Read more
UK online retailer of electrical appliances AO World
Dutch financial services firm Intertrust (INTER.AS) jumped 15.4% to its highest level in more than five years after it said it received several takeover offers.
The IHS Markit survey showed that euro area business growth accelerated unexpectedly this month, but another wave of coronavirus infections and new restrictions, alongside pricing pressures , are likely to hamper the December expansion. Read more
Reporting by Anisha Sircar, Bansari Mayur Kamdar and Shreyashi Sanyal in Bangalore; Editing by Shailesh Kuber, Saumyadeb Chakrabarty and Mark Heinrich
Our Standards: Thomson Reuters Trust Principles.