Europe close: Stocks end week on down note as Covid-19 worries weigh on sentiment
European shares finished the week in the red as the rising number of coronavirus cases across the continent and higher UK borrowing figures dampened sentiment.
The pan-European Stoxx 600 index dipped just 0.10% to 355.51 but all major Continental bourses were lower. Spain’s Ibex gave up early gains as hospitalisation rates rose finishing off by 0.23% at 6,628.3, yet the FTSE 100 advanced 0.34% to 5,842.67 even as the UK reported the highest number of new coronavirus cases in a single day since the pandemic began.
Figures from Britain’s Office for National Statistics showed the government borrowed £35.9bn in August - the third highest monthly figure on record - as tax revenue fell and it spent to deal with the economic effects of the Covid-19 crisis.
Offsetting that news was merger and acquisitions activity, with William Hill up by nearly half as Apollo Capital Management and Caesar's Entertainment tabled rival bids for the bookie.
In the background meanwhile, Kazopi.kz and Buffettology Smaller Companies Investment Trust announced plans to list on the LSE.
August's net borrowing figure was a record for the month and £30.5bn more than a year earlier. But the total was less than in March and April as the economy picked up and some workers returned to work from furlough. It was also less than the average economists' forecast of £38bn.
France's CAC40 on the other hand gave back 0.64% to 4,729.66 after the country also set a new record of daily infections and the Prime Minister Jean Castex warned on Thursday that the government could be forced to reconfine areas.
UK airline, retail, and hospitality stocks were all under pressure as the government imposed minor new restrictions, with concern rising that tougher measures may have to be introduced to stymie the spread of the virus. Finance Minister Rishi Sunak announced new stimulus measures on Thursday to protect what he called "viable" jobs.
“Unemployment is a ticking time-bomb. (Sunak’s) job-saving programme cannot save the U.K. from facing a higher unemployment rate, and this increase in the unemployment rate is going to have an adverse effect on the economy. Hence, sterling's upside is really limited, especially taking into consideration that the Brexit deadline is just around the corner, with no deal in place,” said Naeem Aslam, Chief Market Analyst at Avatrade.
However, travel stocks rallied into the close, pushing the Stoxx 600 sector gauge 3.18% higher.
Shares in Spanish telephone operator MasMovil rose after reports - later denied by the company - that Vodafone had started talks to buy the company.
Vodafone was also initially higher on the news but later surrendered its gains.