European stock markets

European Stocks Mixed After WHO Warning

European stock markets traded mixed Tuesday, with investors digesting a fresh warning about the coronavirus as well as an abundance of corporate news.

The DAX in Germany traded 0.5% lower, the CAC 40 in France fell 0.1% and the U.K.’s FTSE index dropped 0.2%.

The number of new coronavirus infections globally rose last week for the first time in seven weeks, the World Health Organization said on Monday.

WHO Director-General Tedros Adhanom Ghebreyesus warned that it was too early for countries to rely solely on vaccination programs and abandon other measures. This warning comes with European countries discussing the timing of when their mobility restrictions, in place to combat the virus, should be lifted.

German retail sales fell sharply in January, dropping 4.5% on the month, showing the continued impact of these restrictions on Europe’s largest economy.

Also weighing on sentiment in Europe Tuesday were losses in the heavyweight oil sector on falling crude levels, with Royal Dutch Shell , BP and Total all dropping between 1% and 2%..

In corporate news, Danone stock rose 0.5% after the French food group separated the chairman and chief executive roles held by Emmanuel Faber, and launched the search for a new CEO following calls from several shareholders to shake up governance.

In the U.K., Taylor Wimpey stock rose 3.4% after the housebuilder said it would reinstate its dividend after a year in which profit before tax at the firm fell by two thirds. The announcement makes an interesting backdrop to the U.K. budget on Wednesday, which is reportedly likely to include further tax breaks for house buyers.

Travis Perkins stock, by contrast, fell 1.6% after the builders merchant plunged into a loss last year, weighed by restructuring and Covid-related costs. Elsewhere, Boohoo stock fell 7% after a report saying that it faces a possible import ban in the U.S. due to past allegations that it used slave labor in its English factories.

Global equity markets posted hefty gains on Monday, helped by positive news about another Covid-19 vaccine as well as progress in the U.S. $1.9 trillion stimulus bill.

That said, investors continue to debate whether many markets are over-extended following huge stimulus injections to counter the impact of the pandemic. The prospect of faster inflation as the world economy recovers has led to concerns that monetary policy may have to be tightened sooner than expected.

Oil prices weakened Tuesday, as traders turned their attention towards the upcoming meeting of the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, on Thursday.

The pan-European Stoxx 50 climbed up by 0.85% to 3,739.36. In the cash markets, the DAX futures Germany was trading up 1.03%  to 14,185.82. CAC 40 futures in France climbed up by 0.95% to 5865.57 while the FTSE 100 futures in the U.K. rose by 1.25% to 6,695.25 ,at the time of writing.

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