European stocks gave up most of the week’s gains at the opening on Friday as fresh regional lockdowns in France hit investor sentiment.
The pan-European Stoxx 600 fell 0.38% in early trade. US bond yields surged again overnight, hitting the Dow Jones and increasing worries over rising borrowing costs. France’s CAC 40 was down 0.61% after the nation imposed a new four-week lockdown from Friday in 16 regions badly hit by the health crisis.
Oil & gas, banks, and miners led the declines as the fresh lockdowns dampened hopes of a swift economic rebound.
Shares in BP, Royal Dutch Shell and Total were all lower as crude prices plunged almost 7% overnight on fears the new lockdowns will hurt fuel demand.
“A stumble from the Dow Jones last night, a shift in policy from the Bank of Japan, frosty words between the US and China, and a third covid-19 wave in France all undermined sentiment this Friday,” said Spreadex analyst Connor Campbell.
“Though the Federal Reserve and Bank of England made it clear they wouldn’t be turning the stimulus taps off any time soon, that hasn’t stopped the Bank of Japan’s decision to move to a more ‘sustainable’ monetary policy from upsetting the apple cart.”
The US and China have publicly clashed during their first face-to-face high-level talks since Joe Biden took office, suggesting both would take a tough stance as they tried to establish a relationship in the post-Donald Trump era.
In equity news, shares in Telecom Italia fell 5% after comments in past days by government ministers over uncertainty around the single broadband network project.
Shopping centre owner Hammerson topped the Stoxx fallers, down 6% after a downgrade to ‘underweight’ at Barclays and to ‘sell’ at Goldman Sachs.
