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FRANKFURT, May 18 ― European stocks ended flat yesterday as underwhelming Chinese data and caution over the spread of a Covid-19 variant outweighed optimism on the reopening of the British economy, while Sweden's Kinnevik surged and was the top performer.
The pan-European STOXX 600 index ended flat with travel and leisure stocks being the top losers, down 2.3 per cent, while telecommunication stocks jumped the most, led by gains in Spanish telecom firm Telefonica.
Dampening sentiment was data showing that China's factories slowed their output growth in April and retail sales significantly missed expectations as officials warned of new problems affecting the economic recovery.
Meanwhile, fresh restrictions across Asia following a new wave of Covid-19 cases and concerns over the spread of a fast-spreading coronavirus variant first identified in India overshadowed optimism on UK's economic reopening.
“Airlines are on the back foot once again today, with optimism over the reopening of international travel proving short-lived given concerns over the growth of the Indian Covid variant,” said Joshua Mahony, senior market analyst at IG.
“Unfortunately, the risks posed by this latest strain also raise questions around those same businesses that have just found reprieve from lockdown restrictions, with pub and restaurant chains all on the back foot despite the resumption of indoor dining,” added Mahony.
Britain's domestically focused mid-cap index dropped 0.6 per cent, with restaurant and pub operator SSP Group and airlines Easyjet and Wizz Air Holdings being the top drags.
Irish airline Ryanair fell 2.8 per cent after reporting a record annual after-tax loss, as it said there were signs the recovery had begun.
European stocks have performed well so far and surged to all-time highs this month, with the STOXX 600 up nearly 11 per cent so far this year as economic recovery prospects and strong earnings drew buyers of equities.
The European Union has agreed to a partial truce with the United States in a dispute over metal tariffs imposed by former President Donald Trump and to start discussions on global overcapacity and China's “trade-distorting” policies.
Mining stocks gained 0.9 per cent.
In corporate news, Sweden's Kinnevik jumped 8.5 per cent to the top of the STOXX 600 index after the company transferred its stake in online fashion retailer Zalando to shareholders.
Spanish telecoms group Telefonica gained 3.5 per cent as it is seeking buyers for its logistics and express-delivery unit Zeleris, a source familiar with the offer said yesterday, amid a months-long boom in the business as Covid-19 pushes people to shop online.
Drugmakers Sanofi and GlaxoSmithKline jumped 1 per cent and 0.7 per cent respectively after their experimental Covid-19 vaccine showed a robust immune response in early-stage clinical trial results, enabling them to move to a late-stage study. ― Reuters
Source: Malay Mail
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