The European stock market has extended the declining trend into the third consecutive trading session on Monday trading due to concerns over the second coronavirus wave. The World Health Organization warned that economic reopening and easing travel restrictions could spur a new coronavirus wave.
Travel and leisure stocks are among the biggest losers. This is because Dr. Hans Kluge, regional director of The World Health Organization in Europe, stated that an alarming situation is rising in the European region.
He added that weekly cases have topped compared to the first weekly peak in Europe in March. Rising infection rates across Spain and the United Kingdom could force governments to impose economic and travel restrictions.
A Reuter’s survey of economists also indicates that the growth in virus infections is the biggest risk for economic revival. The group of economists has also highlighted concerns over inflation and growth targets.
European stocks grew sharply at the beginning of the last week due to robust economic data. Economic numbers are still improving at a faster pace than expectations. British retail sales grew by 0.8% in the last month, topping analysts’ expectations slightly.
In addition, trade talks between the UK and European Union are going on well as EU Chief Negotiator Michel Barnier said the deal is possible.
The dollar index extended losses on Monday. The index is trading below 92.80 level. The US stock market is also in red on Monday after reporting losses on Friday. Asian equities slipped today due to subdued trading volumes. The yuan edged higher against the US dollar.
“We do have concerns down the stretch about the markets reacting poorly to some of the uncertainties facing us — the election, potentially around Covid-19, and the fact that we don’t have a stimulus package yet,” Rebecca Felton, senior market strategist at Riverfront Investment Group, said on Bloomberg TV.