Title: European Stocks Turn Sharply Lower as Lock-down Rears Its Ugly Head

11/19/2021 04:56AM GMT

By: AnalysisWatch

Auctions in European financial exchanges accelerated on Friday morning as COVID-19-related lock-downs returned to the continent, setting the stage for another potential economic downturn this winter.

In an effort to curb the rising infection rate, Austria has announced it will impose a nationwide lockdown and make vaccination compulsory from 1 February. German Health Minister Jens Spahn also refused to rule out similar measures, raising fears that Europe's largest economy could grind to a halt for a third winter in a row.

At 5:08 AM ET (1008 GMT), Germany's DAX traded 0.3% lower, France's CAC 40 fell 0.5%, and the UK's FTSE 100 traded 0.3% lower. The hardest-hit markets were oil-dependent Russia, down 1.8%, and travel-and tourism-heavy Spain, down 1.7%, as the initial pattern of pandemic selling reasserted itself.

Non-Covidian news was also less than stellar on Friday, with German producer price inflation for October showing a further 3.8% month-on-month rise, taking the annual inflation rate in Europe's largest economy to 18.4%.

In France, unemployment rose more than expected in the third quarter, to 8.1% of the labour force.

In contrast, the UK's latest GfK consumer confidence index unexpectedly rose from 17 to 14 in October, while the country's retail sales increased by a stronger-than-expected 0.8% in the same month. This underpinned the picture of an economy strong enough to withstand a modest hike in interest rates by the Bank of England, as COVID cases in the country are now declining.

In corporate news, shares in Kingfisher fell 4% after the home improvement giant reported a year-on-year decline in sales as consumer spending balanced out after the pandemic.