European stocks subdued amid investors’ Covid and inflation concerns

European stocks closed just slightly in the red on Monday after staging a sharp recovery late last week, as underwhelming Chinese data and a resurgence of Covid-19 cases in some Asian countries outweighed optimism over the reopening of the UK economy.

Fresh restrictions across Asia following a new wave of Covid-19 cases also dampened the mood despite prospects of improving economic recovery in the US and Europe, although investors were also concerned by inflationary pressures in the US.

Dublin

The Iseq closed down 0.65 per cent, with the index led lower by Ryanair. The airline's stock fell 2.8 per cent to €16.44 on a day when it reported a record annual net loss of €815 million.

Although the loss was slightly smaller than expected and chief executive Michael O’Leary suggested a recovery in bookings had already begun, Ryanair declined to give a formal profit outlook for its current full-year, saying only that it “cautiously believed” the outcome would be close to breakeven.

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Bank of Ireland was another faller, finishing down 1.8 per cent at €5.19, while Paddy Power owner Flutter Entertainment closed 2.1 per cent lower at €144.40. Insulation maker Kingspan declined 1.6 per cent to €74.46.

But there were gains for food groups Glanbia and Kerry, with Glanbia adding 3.4 per cent to €14.25 and Kerry adding 1 per cent to €109.60. AIB advanced 0.7 per cent to about €2.59, and building materials giant CRH nudged 0.2 per cent higher to €41.96.

London

The FTSE 100 edged 0.1 per cent lower, dragged by banks and industrial stocks, while the mid-cap FTSE 250 index closed down 0.55 per cent.

Shares of Diploma, a technical products and services provider, jumped almost 7 per cent after it forecast annual results ahead of expectations.

Homebuilder Vistry Group slid 1 per cent, even after raising its annual profit forecast on strong demand. Novacyt jumped 6.1 per cent after the French biotechnology group said the UK’s National Health Service would use its product for detecting Covid-19.

Aer Lingus owner International Consolidated Airlines Group was among the fallers in the travel and leisure sector, declining 3.7 per cent.

After rising 8.9 per cent this year, the FTSE 100 has pared some of those gains in the last few sessions on concerns around resurgence in virus cases across the globe and sooner-than-expected tightening of monetary policy to curb inflation.

Europe

The pan-European Stoxx 600 index closed only marginally lower, losing less than 0.1 per cent, as Italian and Spanish stocks bucked the broadly negative trend seen elsewhere.

The travel and leisure index fell as analysts BNP Paribas downgraded French meal card company Sodexo to "neutral". Sodexo finished 3.7 per cent lower in Paris.

German chemical group Bayer declined 0.5 per cent after a US federal appeals court upheld a $25 million (€20.6 million) judgment and trial verdict finding that the company's Roundup caused a California resident's non-Hodgkin lymphoma.

Sweden's Kinnevik slumped 38 per cent after the company transferred its stake in online fashion retailer Zalando to shareholders.

US

Technology stocks pulled Wall Street's main indexes lower, as signs of inflationary pressures building up in the economy kept investors worried about monetary policy tightening. Apple and Microsoft weighed the most on the benchmark S&P 500 and the Nasdaq in early trading.

AT&T, owner of HBO and Warner Bros studios, and Discovery, home to lifestyle TV networks such as HGTV and TLC, announced a deal to combine their content assets to create a standalone global entertainment and media business. AT&T shares gained 1.5 per cent while Discovery fell about 3 per cent.

Cryptocurrency-related stocks like Marathon Digital, Riot Blockchain and Coinbase fell between 6 per cent and 9 per cent as bitcoin swung in volatile trading.

– Additional reporting: Reuters