European shares fall on slow vaccine roll-out and Wall Street volatility

European Stoxx 600 index ends week down 3.1 per cent

PTSB shares stood out as a sole bright spot among banks, rising 3.9 per cent to 80c.

PTSB shares stood out as a sole bright spot among banks, rising 3.9 per cent to 80c.

 

European stocks dropped on Friday amid heightened concerns around the slow rollout of Covid-19 vaccines mount, and as investors monitored volatile trading on Wall Street amid an ongoing standoff between hedge funds and retail investors over certain stocks.

The pan-European Stoxx 600 index closed 1.9 per cent lower, erasing all of January’s gains and ending the week down 3.1 per cent.

Concerns around the potential economic damage from a new strain of the coronavirus in Europe and delays to vaccine rollouts have dented sentiment in the past few days.

In the US, where the stock market enjoyed a stimulus-led rally last year, volatility was seen following steep gains in heavily shorted stocks, including GameStop and AMC Entertainment after retail traders piled in.

Dublin

Permanent TSB’s (PTSB) shares stood out as a sole bright spot among banks, rising 3.9 per cent to 80c, after The Irish Times reported that it is considering bidding for Ulster Bank’s SME loan book in the event that the latter’s parent, NatWest Group, decides to wind down its unit in the Republic.

“An acquisition of the Ulster Bank Ireland SME portfolio would have a transformative impact on Permanent TSB’s earnings profile, given the scale benefits that would emerge, and it would accelerate its move into a targeted area of growth,” said Davy analyst Diarmaid Sheridan.

Bank of Ireland lost 1.7 per cent to €3.08, while AIB declined by 0.7 per cent to €1.47.

Kerry Group declined by 1.8 per cent to €111.90 as full-year figures from Swiss peer Givaudan failed to inspire. Dalata Hotel Group was another weak spot, falling 3.4 per cent to €3.34, amid worries over the rollout of Covid-19 vaccines.

London

The FTSE 100 ended lower and recorded its worst weekly performance since October, as stalled vaccine rollouts and lockdowns to curb the spread of contagious new coronavirus variants kept investors from jumping into riskier assets.

The blue-chip FTSE 100 index dropped 1.8 per cent.

Drugmaker AstraZeneca fell 3.7 per cent for the week and was the third biggest drag to the FTSE 100 on Friday as a tussle with the EU on vaccine rollouts weighed on the stock.

However, Europe’s medicines regulator recommended approving the drugmaker’s Covid-19 vaccine for people over the age of 18, the third vaccine to be cleared for use in the European Union.

Life insurer Prudential was fell 5.1 per cent on Friday on equity raise and demerger plans, while major brokerages including Deutsche Bank, UBS and Bank of America trimmed their target price on the stock.

Online fashion retailer Boohoo gained 1.5 per after it confirmed it was in exclusive talks with the administrators of Philip Green’s collapsed Arcadia group over the purchase of the Dorothy Perkins, Wallis and Burton brands

Europe

Sweden’s Ericsson jumped 7.6 per cent after reporting fourth-quarter core earnings ahead of market estimates on the back of strong sales of 5G equipment.

German carmaker Daimler edged up 0.9 per cent after it said a strong fourth quarter helped it post better-than-expected 2020 group operating profit and that it was optimistic for 2021.

Swedish fashion retailer H&M fell 5 per cent as it braced for a loss in the first quarter after full-year profits plummeted due to Covid-19.

New York

US stock indexes were lower in early afternoon trading as Covid-19 vaccine data from Johnson & Johnson hurt sentiment, while a standoff between Wall Street hedge funds and small, retail investors weighed.

Johnson & Johnson fell after the drugmaker said its single-dose vaccine was 72 per cent effective in preventing Covid-19 in the US, with a lower rate of 66 per cent observed globally. The results compare to the high bar set by two authorized vaccines from Pfizer Inc/BioNTech and Moderna, which were around 95 per cent effective.

effective in preventing symptomatic illness in key trials when given in two doses.

Worries of a short squeeze grew after an army of retail investors returned to trade shares in GameStop and Koss. The stocks sky-rocketed after brokers including Robinhood eased some of the restrictions they had placed on trading. – Additional reporting Reuters