European stocks were flat at midday, with travel stocks hit by a German quarantine order on traveller arriving form the UK after a rise in Indian variant Covid-19 cases.
The pan-European Stoxx 600 index barely moved the needle at 444.25 points, below its record high of 446.19 points. Markets in Austria, Denmark, Hungary, Norway, Switzerland and Germany closed for holiday.
“The rising tide which lifted all boats earlier in the year has now become choppy waters, as inflation concerns rise to the surface,” said interactive investor head of markets Richard Hunter.
“There is increasing evidence of blockages in the economy as the strength of demand outpaces available supply. Whether this be raw materials or labour, the pressures are clearly inflationary.”
“The question which is currently perplexing investors is whether this is a temporary effect as supply catches up with demand quickly, or whether there are wider factors at play, such as higher prices given the current trend towards deglobalisation, exacerbated by the pandemic.
In equity news, shares in Cineworld rose after Peter Rabbit 2: The Runaway pulled in more people than expected after a national Covid-19 lockdown imposed in January.
Travel stocks were under pressure after Germany’s public health institute declared Britain and Northern Ireland a virus variant region, requiring anyone entering the country from the UK to quarantine for two weeks on arrival.
The move hit German flag carrier Lufthansa, which fell more than 6.5%, Trainline, SSP Group and easyJet.
