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Coronavirus: European stocks slide on rising infections and UK quarantine rules

Tom Belger
·Finance and policy reporter
·3-min read
PARIS, FRANCE - AUGUST 13: Police officers patrol in touristic and frequented areas of Paris as government takes new measures against coronavirus (Covid-19) forcing the wearing of mask in certain streets frequented in order to combat the pandemic in Paris, France on August 13, 2020. (Photo by Julien Mattia/Anadolu Agency via Getty Images)
Police officers patrol in touristy areas of Paris as mask rules are tightened. Photo: Julien Mattia/Anadolu Agency via Getty Images

European stocks dipped on Friday, amid concerns over rising coronavirus cases in several countries and new coronavirus restrictions on travel between France and Britain.

Worries over worse-than-expected factory and retail data in China and the continued deadlock over new fiscal stimulus in the US also weighed on sentiment.

Britain’s FTSE 100 (^FTSE) was down 1.6% at the close, France’s CAC 40 (^FCHI) down 1.6% and Germany’s DAX (^GDAXI) 0.7% lower.

The pan-European Stoxx 600 (^STOXX) fell 1.2%, with travel stocks on the index down 2.3%. TUI (TUI.L), EasyJet (EZJ.L), British Airways owner IAG (IAG.L) and Ryanair (RYA.L) all dropped more than 4%.

It came as Britain announced a 14-day quarantine on travellers arriving from France late on Thursday, after French authorities reported more than 2,500 new daily cases for a second day in a row. It marked a return to infection rates last seen in mid-April during lockdown.

“Apart from the immediate damage this will do at the height of the school holidays and peak summer season, the quarantine decision also underlines the inherent risk you take in booking a holiday abroad right now, which will do nothing for consumer confidence,” said Neil Wilson, chief market analyst at Markets.com.

Other European states have seen upticks in infections since lockdowns have eased. Spain reported its highest new daily cases since its lockdown ended seven weeks ago on Thursday.

READ MORE: UK airports braced for travel chaos after France quarantine imposed

New coronavirus cases reported daily since late February in the EU, EEA and UK, as of 13 August. Chart: European Centre for Disease Prevention and Control
New coronavirus cases reported daily since late February in the EU, EEA and UK, as of 13 August. Chart: European Centre for Disease Prevention and Control

Earlier this week Norway imposed quarantine rules on new arrivals after its cases last week hit the highest level since April. Germany has imposed compulsory tests for travellers from areas classed as high-risk after its cases exceeded 1,000-a-day for the first time since May last week.

Meanwhile the Netherlands has seen cases rise 55% week-on-week, and Greece reported its highest daily tally since the outbreak began on Wednesday.

Investors were also looking at new economic data. Industrial production was less strong than expected and retail sales saw a surprise drop in China in figures released overnight.

But Michael Hewson, chief market analyst at CMC Markets UK, noted European markets remained on course for a second week of gains despite virus concerns and stock declines on Thursday and in Friday early trading.

China’s Shanghai Composite Index (000001.SS) still rose 1.2% and Japan’s Nikkei (^N225) was up 1.2% overnight, but the Hong Kong Hang Seng (^HSI) was unchanged.

Stocks were fairly muted in the US as European markets closed. The S&P 500 (^GSPC) was flat, while the Dow Jones (^DJI) was up 0.1% and the Nasdaq (^IXIC) slid 0.3%.

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