Europe open: Shares lower on tighter Covid curb plans, UK retail sales

European stocks fell on Friday as tighter Covid-19 restrictions hit travel stocks and UK retail sales disappointed.

Investors were also waiting for business activity data which to gauge the pace of recovery from the coronavirus crisis.

The pan-European STOXX 600 index fell 0.88% by 0848 GMT, shares were down a similar level in Germany, while French stocks were 1% lower.

UK retail sales figures for December increased a worse-than-expected 0.3% against the 1.4% forecast, alongside a downwards revision to November’s figure, from -3.8% to -4.1%. Overall retail sales marked their worst year since records began.

Public sector net borrowing revealed a rise, taking Britain’s national debt above £2trn for the first time.

Investors were also awaiting IHS Markit’s early readings of the euro zone and UK Purchasing Managers’ Index for January, likely to show business activity contracted from December due to renewed lockdowns.

“It was one of those mornings where the markets got a reminder of covid-past, and a glimpse into covid-future, with (Prime Minister) Boris Johnson refusing to rule out lockdown extending all the way into the summer,” said Spreadex analyst Connor Campbell.

“Looking ahead and the buzz of the Biden administration seems to have quickly worn off for the Dow Jones. It’s heading for a 190 point plunge this afternoon, a decline that would once again knock it below 31,000.”

Travels stocks plunged after the European Union proposed to label hotspots of COVID-19 infections as “dark red” zones, and travellers from those areas will have to take a test before departure and undergo quarantine

Holiday group TUI slumped 8%, easyJet 3.82%, while Lufthansa and Air France fell about 2%.

Shares in German engineer Siemens rose 4.1% as it reported stronger-than-expected preliminary results for its first quarter, driven by a strong performance of its digital division.