© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 17, 2021. REUTERS/Staff
By Anisha Sircar
(Reuters) – European stocks gave up early gains on Friday as concerns over the economic damage from fresh COVID-19 lockdowns in the region hammered cyclical sectors such as banks and automakers.
The pan-European index fell 0.3% after hovering near record highs earlier in the session.
It lost ground after news that Austria will become the first country in western Europe to reimpose a full COVID-19 lockdown this autumn to tackle a new wave of infections.
Germany’s Health Minister Jens Spahn said the coronavirus situation in the country was so grave that a lockdown, including for people who have been vaccinated, cannot be ruled out.
Frankfurt shares fell 0.4%, while sectors more exposed to economic cycles such as banks, automakers and travel & leisure fell between 1.4% and 2.8%.
South European markets, including those in Spain and Italy, fell more than 1% each.
“COVID-19 is getting worse in Europe, but the virus is having less of an effect on stock markets compared to the first wave as vaccines roll out and treatment progresses,” said Capital Economics market economist Thomas Mathews.
“But if things worsen and a major part of the economy goes into lockdown, it might start to take a toll on regional stock markets.”
European stocks have hit a series of record highs this month as a stronger-than-expected earnings season helped investors look past concerns about rising inflationary pressures.
European Central Bank President Christine Lagarde said inflation in the euro zone will fade so the ECB should not tighten policy as it could choke off the recovery, and hinted at continued bond purchases next year.
The ECB is due to decide on the future of its bond-purchase programmes at its Dec. 16 policy meeting.
Irish airline Ryanair dropped 2.6% after announcing its intention to delist from the London Stock Exchange, citing costs related to retaining an additional listing.
French luxury group Hermes gained 5.1%, after jumping more than 6% in the previous session, on market talks that it may be added to the Eurostoxx 50 index during a December review.
Focus is also on Moody’s (NYSE:) imminent review of Greece’s credit rating, with analysts expecting an upgrade due to better-than-expected macro trends. Greece’s main Athens stock index has rallied about 15% this year on a broader rebound in the economy.
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Oil Russia ban news: Russia will ban the sale of its oil to countries that have imposed a price ceiling
Will Russia sell oil to Europe? The administration of President Vladimir Putin is preparing an order prohibiting Russian companies and any trader from buying Russian oil to sell raw materials to countries and companies that have imposed a price ceiling on Moscow. Bloomberg news agency wrote this, citing a report from sources.
“The Kremlin is preparing a presidential decree banning Russian companies and any traders buying national oil from selling it to anyone who participates in the price ceiling,” the publication wrote.
According to the newspaper’s interlocutors, this would prohibit any mention of the price ceiling in contracts for Russian crude, as well as transferring it to countries that have joined the price ceiling for the natural resource.
In the first half of September, the press service of the US Treasury Department said that the USA, together with its allies from G7 (Great Britain, Germany, Italy, Canada, France and Japan) and the European Union (EU) would impose a ban on marine transportation of Russian oil on December 5 and oil products – on February 5.
Earlier we reported that EU negotiations on limiting the prices of Russian oil reached a deadlock today.
EU talks on restrictions on Russian crude oil prices today stalled
Negotiations between the European Union countries about the “ceiling” of Russian crude oil prices today reached an impasse; Bloomberg reported, according to its sources.
Representatives of the bloc cannot reach an agreement on the ceiling price of Russian oil. According to the agency, the proposed European Commission limit of $65-70 per barrel, Poland and the Baltic countries believe “too generous,” while Greece and Malta, which is actively engaged in transporting fuel, do not want the limit to fall below $ 70. Recall that the Russian response to the oil price cap was negative. The Russian government has officially said that it will only sell oil at market prices.
“We are looking for ways to make this solution work and we are trying to find a common ground to implement it in a perfectly pragmatic and efficient way, while avoiding that it may cause excessive inconvenience to the European Union,” said German Chancellor Olaf Scholz.
Earlier, we reported that the SEC fined Goldman Sachs $4 million for non-compliance with ESG fund principles.
More than 50% of Germans said they had given up shopping for new clothes and electronics. Is Germany’s economy failing?
Die Welt newspaper cited a survey by the consulting company EY and said that about 56% of Germans who took part in the survey said that they had practically refused to buy new clothes.
Also, 56% of German consumers reported that they now refrain from buying televisions, smartphones, laptops and game consoles. Also, nearly one in two now uses less gasoline, and one in four said they are saving on medications.
What caused the economic crisis in Germany? The main reason is the war in Ukraine and the resulting sanctions by the EU. Also, every second respondent reported that at the moment he could buy only the essentials. According to EY analysts, German households plan to further reduce spending in the coming months. In particular, they plan to save money on food delivery and entertainment.
Earlier, we reported that prices for liquefied natural gas in Asia reached their highest since October.
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