Europe open: Shares fall after Covid woes spark Wall St sell-off

European shares fell on Thursday morning after a sharp sell-off on Wall Street as investors continued to fret about more contagious variants of the coronavirus.

The pan-European Stoxx 600 was down 1.9% at 0913 GMT, with major regional bourses tracking the decline.

In the US overnight, strong earnings from Apple and Facebook and the US Federal Reserve’s pledge to stick to loose monetary policy were cast aside by investors as they focused on tighter Covid curbs in Europe and a row over vaccine allocations.

With new strains of the virus emerging in Britain, Brazil and South Africa, Germany was preparing entry restrictions for travellers from those countries.

German health minister Jens Spahn said he expected the current shortage of coronavirus vaccines to continue well into April.

Meanwhile the spat between the UK and European Union over the Oxford/AstraZeneca vaccine intensified.

Brussels has complained over the UK government’s decision to hoard locally-produced doses. The 27 member bloc has been angered after it reportedly allowed the pharma firm to use European sites to produce the vaccine when UK its UK facility ran into difficulties.

The EU argues that Britain should share its output as a quid pro quo for that act of solidarity.

Reports suggested the UK would only supply other countries after it had made 100 million doses for local distribution.

In equity news, shares in British life insurer Prudential fell 8% as the company said it would separate its US business Jackson through a demerger to better focus on Asian and African markets, while adding it was considering raising $2.5bn -$3bn in new equity.

EasyJet shares fell as the budget airline said it expected to fly no more than 10% of 2019 capacity in the second quarter as tighter coronavirus restrictions triggered an 88% slump in revenue for the three months.

Drinks maker Diageo bucked the trend with a 3.4% rise after the company reported a surprise jump in underlying first-half net sales growth, helped by strong US demand.

Tate & Lyle was also on the rise after it hailed a "strong" third-quarter performance, with volume growth in each business and group revenue up 8% compared to the same period a year ago.