European shares fall on Covid-19 case resurgence

European equity markets closed lower on Friday, with travel and banking leading declines as a resurgence in coronavirus cases across the continent rekindled fears about the pandemic’s impact on a nascent economic recovery.

Dublin

The Iseq All-Share index closed down 1.2 per cent on Friday as investors awaited an announcement from Government on Dublin’s return to partial lockdown.

As expected, travel and leisure stocks took a hit. Ryanair fell 4.43 per cent to €12.08, although that was an outperformance compared to some UK peers. Aer Lingus owner IAG, for example, tumbled 15 per cent.

Hotel group Dalata, meanwhile, fell 3.32 per cent to €2.76.

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Applegreen took a small slip after issuing results for the first half of this year. The company said revenues fell 26.6 per cent to €1.1 billion. Shares in the company dropped 0.57 per cent to €3.46.

Shares in Permanent TSB rose 5 per cent to 44c after The Irish Times reported that Ulster Bank's parent company was instigating a strategic review of its presence in the Republic. Bank of Ireland fell 2.8 per cent to €1.74 while AIB declined by 1.05 per cent to close at €0.99.

It was a mixed day for construction names with building materials giant CRH falling 2.4 per cent to €31.94 while insulation maker Kingspan rose 0.61 per cent to €73.95.

London

The FTSE 250 index shed 1 per cent while the FTSE 100 fell 0.7 per cent.

Online supermarket Ocado Group was the best weekly performing bluechip stock.

Security firm G4S was the best performing mid-cap.

Banks were among the worst performing FTSE sector this week after the Bank of England flagged a possible shift to negative rates.

As above, Aer Lingus owner IAG, easyJet and cruise operator Carnival fell between 8 per cent and 15 per cent as talk of a second lockdown in the United Kingdom did the rounds after new Covid-19 cases almost doubled to 6,000 per day.

Europe

The pan-European Stoxx 600 index fell 0.7 per cent, with the banking-heavy Spanish index down 2.2 per cent and the French and Italian bourses more than 1 per cent lower.

Travel and leisure was the worst-performing sector, down 3.5 per cent.

The banking index fell 2.6 per cent, hitting its lowest level since May 26th and on course for record-lows as major central banks pledged to keep interest rates lower for a long time.

Sparking hopes of consolidation among lenders battling the fallout from the Covid-19 pandemic, Caixabank agreed to buy state-owned Bankia for €4.3 billion to create Spain's biggest domestic bank. Bankia fell 4.8 per cent and Caixabank was down 2.2 per cent after rallying in the run up to the announcement.

Swedbank, SEB, Handelsbanken and Nordea were down between 1.8 per cent and 5.3 per cent on fears that the Swedish banks will bear the brunt of a recently proposed government "risk tax".

The London Stock Exchange Group entered exclusive talks to sell Borsa Italiana to France's Euronext, driving its shares up 4.3 per cent.

Swedish telecoms gear maker Ericsson was up 1.3 per cent after it agreed to buy US-based wireless networking company Cradlepoint in a $1.1 billion deal.

New York

Apple,Microsoft, Amazon. com and Alphabet led declines on the Nasdaq, which fell between 1.5 per cent and 2 per cent.

Tesla rose 5 per cent as two analysts raised their price targets on the electric carmaker's shares ahead of its highly anticipated "Battery Day" event next week.

Oracle fell 0.1 per cent after Reuters reported the US commerce department plans to issue an order on Friday that will bar people in the United States from downloading Chinese-owned messaging app WeChat and video-sharing app TikTok starting on September 20th.

Nike rose 0.3 per cent as several brokerages raised their price targets ahead of the world's largest sportswear maker's quarterly results next week.

– Additional reporting: Reuters