LONDON, Nov 19 — Covid-19 lockdowns have returned anew to haunt Europe’s economic prospects, forcing investors today to reassess portfolios and sell vulnerable assets such as the euro and bank stocks.
The developments upended the buoyant mood in European equity markets where French and German shares had hit a string of record highs, thanks to a strong earnings recovery.“One thing is certain, if the whole of Europe had to go under lockdown once more, and depending on how long that would last, we would need to rethink our growth scenarios,” said Stephane Ekolo, a global equity strategist at the brokerage Tradition.
It still compares favourably with predictions of a 21 per cent earnings growth for S&P 500 companies. “Markets have been aware for a few weeks now that this winter will be difficult and that the vaccination rollout doesn’t reduce lockdown risk by 100 per cent,” said Emmanuel Cau, head of European equity strategy at Barclays.
And there will be winners: healthcare stocks rose 1 per cent today, while the technology sector gained 0.6 per cent.Investors made a beeline for bonds, turning Germany’s entire yield curve negative for the first time since August as 30-year government borrowing costs fell below 0 per cent.
Sverige Senaste nytt, Sverige Rubriker
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