European stocks are in red, coronavirus concerns weigh on sentiments
European stocks have lost the upside momentum amid concerns over rising virus infections as well as the delivery of the Pfizer vaccine. Following the Monday rally, the European stocks rally faded due to slowing economic growth on lockdowns.
The market analysts believe that fresh lockdowns in the Eurozone could have a significant impact on the fourth-quarter GDP.
“Renewed lockdowns across the eurozone are likely to shave roughly 2% off GDP in the fourth quarter, according to ING analysts’ forecasts, while the risk of further restrictions in the U.S. will put a considerable brake on activity.”
Tech Stocks are tumbling
Tech stocks have lost almost 1.7% of value in Tuesday trading and extended the downside in Wednesday trading as investors are moving away from pandemic darlings.
Investors believe virus vaccine would turn back people to their traditional living and business styles, which would reduce internet usage. Online shopping platforms and social media companies are among the biggest laggards.
US tech stock has also lost substantial value in the past three days, with the NASDAQ index fell from over 12000 levels to 11555 points. Zoom Video communication, Amazon, Facebook, and other internet stocks reported double-digit percentage losses since the beginning of this week.
Banks, entertainment, and industrial European stocks soared
Banks stocks bounced back since the announcement of the coronavirus vaccine. Traveling and entertainment stocks are also among the biggest gainers. This is because coronavirus spread has significantly devastated their revenues and businesses in the past two quarters. Airline companies have reported high double-digit gains in the past three days.
Despite the virus-related rally, European stocks are likely to take a longer time for recovery due to concerns over virus infections and economic growth. The delivery of vaccines is also the biggest question mark for European governments. This is because the company says vaccines are required to be stored at freezing temperatures.