European shares end lower on fears of ‘second wave’ of Covid-19

European shares closed lower on Thursday as a spike in Covid-19 cases in China and some US states triggered fears of a second wave of infections. And a 60 per cent plunge in Wirecard shares over missing cash balances weighed on the Stoxx 600 index.

Investors scaled back on risk as the daily count of cases hit new highs in California and Texas, two of the US's most populous states, while Beijing ramped up movement curbs.

"The faster economies reopen, the more likely we will see a second wave of infections translate into new lockdowns. Hence, the path over the coming months will be murky," said Hussein Sayed, chief market strategist at FXTM.

The pan-European Stoxx 600 index fell 0.7 per cent after two straight days of gains, as hopes of a swift recovery from the pandemic-led economic slump were knocked back.

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DUBLIN

Dublin's Iseq closed up nearly 1 per cent at 6,175, bucking the trend across Europe. Ryanair was one of the main drivers, increasing 3.4 per cent to €11.44, its strongest position for several months, as European airlines were cleared for take-off in July after three months of lockdown.

The resumption of Premiership soccer in England boosted the fortunes of PaddyPower Betfair owner Flutter, which rose €123.90. Building materials group CRH and packaging company Smurfit Kappa, two companies tied into the global economic outlook, drifted down 0.4 per cent and 0.6 per cent respectively.

Among the banks, AIB and Bank of Ireland went in different directions. AIB was down nearly 2 per cent at €1.12 while Bank of Ireland was up 2 per cent at €1.80. Swiss-Irish baked goods specialist Aryzta endured another difficult session, closing down 2.5 per cent at 42 cent.

LONDON

British shares fell on Thursday after the Bank of England slowed the pace of its huge bond-buying programme, while fears of a second wave of Covid-19 infections also dampened sentiment. The blue-chip FTSE 100 was down 0.5 per cent following its strongest two-day percentage gain in two weeks on Wednesday.

The BoE said it saw signs that the British economy was recovering from a pandemic-induced slump. It raised its asset purchase target by £100 billion, as expected, but disappointed markets as it said the increase should only see it through to the end of the year.

AstraZeneca weighed the most, down 2.2 per cent. The European Commission is in advanced deal talks with Johnson & Johnson on its Covid-19 vaccine under development, sources told Reuters. Last week, many euro zone countries said they had acquired 400 million potential vaccine doses from the British drugmaker for its potential Covid-19 shot.

EUROPE

Dragging down the pan-European Stoxx 600 index was Wirecard, which plummeted 61.8 per cent after the German payments company's auditor refused to sign off its 2019 accounts over a missing $2.1 billion. The company warned the delay could cause billions in loans to be called in as early as Friday.

Aggressive monetary and fiscal stimulus and less-than-dire economic data have helped European indices regain about 36 per cent from their March lows, but analysts say another wave of infections could lead to worries of more restrictions and weigh on consumer behaviour.

Madrid-listed shares of Siemens Gamesa tumbled 7.6 per cent after the wind turbine maker replaced chief executive Markus Tacke with Andreas Nauen and warned of an operating loss in the third quarter late on Wednesday.

German online fashion retailer Zalando rose 7.1 per cent to the top of the Stoxx 600, after forecasting a bigger increase in sales and operating profit in the second quarter than analysts' expectations as the pandemic prompts more people to shop online.

NEW YORK

The S&P 500 and the Dow were largely unchanged on Thursday as investors stayed on the sidelines amid an uptick in coronavirus infections in parts of the United States and an elevated level of weekly jobless claims. Several US states, including Texas, Florida and Oklahoma, reported a surge in new infections. However, president Donald Trump said late on Wednesday that the United States would not close businesses again.

The Labor Department’s report showed weekly jobless claims declining for the 11th straight week, but the pace of declines has slowed as tepid demand and fractured supply chains have sparked a second wave of layoffs.

Biogen dropped 5.2 per cent after a US district court ruled in favour of generic drugmaker Mylan in a patent dispute over the drugmaker's blockbuster multiple sclerosis drug Tecfidera. Mylan rose 4.3 per cent. Spotify Technology jumped 10 per cent after signing a podcast deal with AT&T's Warner Bros and DC Entertainment featuring popular DC Comics characters.

– Additional reporting by Reuters