European Bourses Decline Modestly Midday On Profit-Taking, Pandemic Outlook

Monday, January 11, 2021 6:56 AM | MT Newswires

European bourses were lower mid-session Monday, as traders booked profit from recent gains and record-highs in German equities, and as the ongoing COVID-19 pandemic threatens to keep areas throughout the region in lockdown modes.

German Chancellor Angela Merkel, after her country topped 40,000 virus-related deaths, said Saturday the upcoming weeks will be "the hardest phase of the pandemic," with hospitals overburdened. Rising COVID-19 counts in China have also undercut investor sentiment, said analysts.

The broad Stoxx Europe 600 Index is off 0.2%, weighed also by weak commodities issues. Frankfurt's DAX fell 0.5% and Spain's IBEX 35 lost 0.1%. In London, the FTSE 100 declined. British Land, a REIT traded in London, dropped 2% after saying it has collected half of the retail rents owed in past quarter, with businesses of many tenants closed because of the pandemic.

On the sector metrics, the Stoxx Europe 600 Technology Index rose marginally, and the Stoxx 600 Bank Index was steady. The Stoxx Europe Oil & Gas Index was off 1%.

Front-month Brent crude futures prices were down 1.4%, near $55.20 a barrel, on concerns that lockdowns would further weaken demand for oil.

The Euro Stoxx 50 volatility index was up 4.1% to 21.39, indicating modestly above-average volatility for European stock markets in the next 30 days, but still only just a little above the lowest (most positive) readings of the pandemic months. Above the 20-mark on the index indicates above-average volatility ahead, while below 20 suggests expectations for calmer markets.

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