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Europe close: Rising Covid-19 cases drag on sentiment

By Alexander Bueso

Date: Friday 16 Jul 2021

Europe close: Rising Covid-19 cases drag on sentiment

(Sharecast News) - European stocks finished the week on a down note even as travel stocks rallied, as rising numbers of Covid-19 cases across the Continent continued to sap investors' confidence.
"We should not get ahead of ourselves however; the selloff on Wall Street is relatively contained, but the weakness in Europe tells a different story, and it is the growing crisis in infections that has hurt risk appetite there and will continue to hobble things for the time being, especially with an ECB meeting on the calendar next week that might potentially signal a modestly hawkish shift," said IG chief market analyst Chris Beauchamp.

The pan-European Stoxx 600 index was down 0.32% at 454.74, while the German Dax was off by 0.57% to 15,540.31 and the Cac-40 gave back 0.51% to 6,460.08.

Data from the EU's statistics agency Eurostat showed the cost of living in the Eurozone dipped last month as energy and services prices fell back. The annual rate of increase in the euro zone's Consumer Price Index dipped from an upwardly revised 2.0% for May to 1.9% in June.

In equity news, Swedbank rose 3% after it reported a better-than-expected profit amid a booming mortgage market and record levels of commission income.

UK home repairs and improvements business HomeServe saw its shares rise as the firm backed its full-year guidance on Friday ahead of its annual meeting.

Shares in Cartier-maker Richemont dipped as quarterly constant-currency sales more than doubled, lifted by a strong performance in the Americas from its jewellery brands.

Sweden's Ericsson slid 9% after it reported second-quarter core earnings below market estimates, hit by a decline in sales in mainland China.

Sales, marketing and support services group DCC gained 2.44% after saying it traded "very well" in the first quarter, with operating profit growth well ahead of the prior year and modestly ahead of expectations.

Premier Inn owner Whitbread also rallied after Peel Hunt upgraded the shares to 'buy' from 'add', saying they have been oversold on reopening fears.

Travel and leisure stocks were on the up, recovering from Covid-related losses earlier in the week. British Airways parent IAG, InterContinental Hotels, engine maker Rolls-Royce, Cineworld, TUI, Wetherspoons and Wizz Air all advanced.

Burberry stock on the other hand fell 5% despite the British luxury brand reporting a return to pre-pandemic sales levels as investors fretted about the impending departure of chief executive Marco Gobbetti and warnings of foreign exchange headwinds later in the year.

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