European stocks on Friday snapped four weeks of gains, as the prospect of tighter lockdowns, slow vaccine shipments to the continent and resurgent COVID-19 cases in China dampened hopes of a speedy economic recovery.
The pan-European STOXX 600 index closed down 1.01 percent at 407.85 in its worst session since Dec. 21, with losses accelerating after Wall Street stocks tumbled following big bank earnings.
The STOXX 600 logged a 0.81 percent weekly decline, its first since the middle of last month.
Adding to worries, some EU nations are receiving fewer than expected doses of COVID-19 vaccines as US pharmaceutical firm Pfizer slowed shipments of the vaccine developed with German partner BioNTech. BioNTech shares dropped 2.2 percent.
German Chancellor Angela Merkel called for “very fast action” to counter the spread of COVID-19 as the country saw a record number of virus-related deaths, while France said that it would bolster its border controls from tomorrow.
The German DAX dropped 1.44 percent to 13,787.73, a weekly decline of 1.86 percent, and France’s CAC 40 fell 1.22 percent to 5,611.69, losing 1.67 percent on the week
In London, the FTSE 100 dropped 0.97 percent to 6,735.71, despite data showing that the UK’s economy recorded a smaller-than-expected contraction in November.
The FTSE 100 declined 2 percent from a week earlier.
The mining, and oil and gas sectors slumped 3.1 percent and 2.6 percent, respectively, after Chinese authorities put more than 28 million people under new lockdowns, raising concerns about demand from the major consumer of commodities.
Hopes of a large US fiscal stimulus sent the STOXX 600 to a 11-month peak earlier this week, but markets retreated after US president-elect Joe Biden outlined a US$1.9 trillion proposal that raised worries of a tax hike.
“Market positioning had been quite aggressive, so I suppose it is a pause for breath,” said Roger Jones, head of equities at London & Capital. “The rollout and the speed of vaccination is becoming increasingly important and the market is willing to look through a period of extended lockdown if it’s a relatively short period.”
German business software group SAP closed down 0.7 percent, reversing early gains after it released preliminary annual results that came at the high end of guidance.
Siemens Energy AG fell 6.3 percent after General Electric Co accused a subsidiary of the power distribution company of using stolen trade secrets to rig bids for lucrative contracts.
French grocer Carrefour fell almost 3 percent after the French government all but killed off a possible US$20 billion takeover by Canada’s Alimentation Couche Tard.
Additional reporting by staff writer.
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