Fear of lockdowns is driving European markets

LAST UPDATE: 15:16

The possibility of tightening the restrictive measures in Germany to deal with the coronavirus pandemic, in the context of the lockdown implemented by Austria today, has aggravated the already cautious climate in the European markets, with the indices losing the mild gains recorded since the beginning. sitting and now moving to the “red”.

German Chancellor Angela Merkel today warned CDU officials that the restrictive measures in place in Germany “are not sufficient” in the face of the “dramatic situation” caused by the resurgence of coronavirus cases in the country, according to party sources. if the fourth wave of the pandemic is not stopped the hospitals will face a very serious problem.

With today’s developments and the daily record of cases, the health situation “will be worse than we have known” until today, Merkel warned.

The German chancellor’s comment intensified the concerns of investors, who are already closely following the developments on the pandemic front, after Austria announced on Friday that a total, national lockdown is being implemented from today to stop the pandemic again in the country, being the first country in the European Union to take such strict measures once again after last year’s lockdown. Going a step further, the Austrian government has announced that vaccination of the population will also become mandatory from 1 February.

This is because these latest developments evoke unpleasant memories of the domino lockdowns that took place last year, when Europe was at the center of the pandemic, and which led to economic downturns, with investors fearing that a new round of restrictive measures would could undermine the recovery of economies again.

In the midst of this climate, all European stock markets lost their initial modest gains and returned to negative territory. More specifically, the pan-European index Stoxx 600 now records losses of 0.09% at 485.66 points, while the Euro Stoxx 50 marks a drop of 0.32% to 4,342.35 points.

In Frankfurt, the index DAX “loses” 0.27% to 16,116.75 points, in Paris CAC 40 notes losses of 0.24% to 7,095.49 points, while in London the FTSE 100 moves 0.13% lower, to 7,213.93 points.

In the Euroregion, the index IBEX 35 in Madrid moves with marginal fluctuations around 8,753 units, while in Milan the FTSE MIB declines by 0.41%.

In terms of individual companies, the share of Telecom Italia “jumps” more than 27% after the takeover offer of 10.8 billion euros received by the company from the American investment fund KKR.

On the other hand, the title of Ericsson writes a loss of 3.4, which announced an agreement for the purchase of the cloud communications company Vonage for 6.2 billion dollars.

The climate is also exacerbated by the Bundesbank’s estimate that inflation in Germany could soar to 6%, a development that raises concerns about an earlier-than-expected tightening of monetary policy, which could also hurt economic growth.

Investors are looking to the other side of the Atlantic waiting to see how the market will move this “stump” due to Thanksgiving (markets will be closed on Thursday, while trading will be completed earlier on Friday) week, which has a profit history, something that is expected to be repeated this year.

Investors, meanwhile, are awaiting the name of US President Joe Biden’s “choice” for the post of Federal Reserve chairman after the end of Jerome Powell’s term.