European shares fall for the third week in a row
European stocks fell on Friday, capping their third straight week in the red, as the basic resources sector was hit by declines in Anglo American PLC, but news that the UK was mulling easing travel restrictions boosted airlines and hotel groups.
Anglo American tumbled 8.1 percent after Morgan Stanley and UBS Group AG downgraded the stock.
The European mining index was also hit by worries about slowing growth in China, falling nearly 8 percent for the week.
The pan-European STOXX 600 fell 0.9 percent on the day, but fell 1 percent for the week.
London’s miner-heavy FTSE 100 index shed 0.9 percent, while German stocks fell 1 percent.
Most regional indices were pressured this week on worries about slowing global growth and tighter regulation of Chinese firms.
“Although still fairly measured at present, this current sell-off has the potential to be one of the most dramatic pullbacks we have seen all year, as inflation, stagflation, slowdown and virus risks all combine to knock back European and US markets,” IG chief market analyst Chris Beauchamp said.
Meanwhile, after closing up 3.4 percent on Thursday in one of the best single-day performances this year, the European travel and leisure index added 1.2 percent on Friday. The index closed 2.7 percent higher for the week, leading gains across European sectors.
Wizz Air Holdings PLC, British Airways owner IAG and InterContinental Hotels Group PLC rose 2 to 5 percent after the UK said it would simplify COVID-19 rules for international travel.
While European stock markets ended the week on a steady footing, next week could be pivotal in determining near-term market direction, with the US Federal Reserve and the Bank of England’s policy meetings, as well as German elections on deck.
“If the caution we have seen this week does carry over into Monday and beyond, then the next Fed meeting provides another reason to tread carefully,” Beauchamp said.
China-exposed luxury stocks such as LVMH Moet Hennessy Louis Vuitton SE, Kering SA, Hermes International SCA and Richemont SA rebounded, following sharp losses earlier this week on fears of fresh COVID-19 restrictions and regulatory moves in China.
Germany’s Commerzbank AG climbed 1.2 percent after a Handelsblatt report said US investor Cerberus Capital Management was considering taking a 15.6 percent state in the bank after the federal election.
Spanish pharmaceuticals company Grifols SA rose 5.8 percent after it proposed a 1.6 billion euro (US$1.9 billion) takeover of its German rival Biotest AG in a move to consolidate the plasma-based drug industry.
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