Fears of second wave of Covid-19 rocks equity markets

Fears of a second wave of Covid-19 infections rocked world markets on Monday, knocking down oil prices and a gauge of global equity performance more than 2 per cent at one point, as investors grappled with how to assess the economic recovery.

DUBLIN

The Iseq all-share index closed 0.4 per cent higher on Monday, a stronger performance than many of its European peers.

After plummeting sharply last week, there was a small relief rally for banking stocks with AIB rising 2.44 per cent to €1.09 and Bank of Ireland closing 0.3 per cent higher at €1.65.

There was little in the way of stock specific news on the day while property names fared well with housebuilder Glenveagh Properties up 4.1 per cent at €0.66. I-Res Reit and Hibernia Reit rose marginally on the day. Cairn Homes fell 2.11 per cent to €6.95 and was one of the few losers on the day.

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Another loser was airline Ryanair, which closed 2.12 per cent at €10.82.

With the programme for government showing a commitment to accelerate affordable and social housebuilding, materials giant CRH closed up 1.15 per cent at €29.94. Insulation maker Kingspan, meanwhile, ended the day down 0.48 per cent at €52.05

LONDON

London’s FTSE 100 fell 0.66 per cent recovering slightly from a more than 2 per cent fall in early trade.

Oil major BP slipped 2.18 per cent after saying it would write off up to $17.5 billion in the value of its assets. Like its rivals, the British oil major is set to take a big hit to revenue from an unprecedented collapse in demand due to the pandemic. The impairments are set to raise its debt burden sharply and increase pressure to reduce its dividend.

Low-cost airline easyJet shed 4.65 per cent even as it resumed flying for the first time since March 30th. The wider travel sector was off 1.34 per cent, falling for the fifth session in six.

Recruiting firm SThree slid 2.04 per cent on reporting lower half-year net fees as the pandemic forced businesses around the world to put a freeze on hiring activity.

Business supplies distributor Bunzl was a gainer on the FTSE 100, jumping 9.2 per cent, as it forecast an increase in revenue for the first half of the year, boosted by robust demand from the grocery, safety and healthcare sectors.

EUROPE

The pan-European Stoxx 600 fell 0.3 per cent, slipping further from its 5.7 per cent fall last week, with the exporter-heavy German index among the losers.

Major European indexes have moved further away from their three-month highs hit recently due to a rise in Covid-19 cases in the United States and a downbeat economic outlook from the Federal Reserve last week.

European indexes also came under pressure after data showed China’s industrial output grew by a lower-than-expected 4.4 per cent in May from a year earlier, while retail sales fell 2.8 per cent, missing expectations, in a sign of weak domestic demand.

Swiss sensor maker Sensirion jumped 22.7 per cent after lifting its 2020 outlook as sales of gas sensors for medical ventilators needed to treat Covid-19 patients surged.

H&M reported a sharp but slightly smaller-than-expected drop in second-quarter sales as measures to slow the Covid-19 pandemic slammed the fasion retail sector. Shares of the world's second-biggest fashion retailer closed up 0.35 per cent.

Meanwhile, European countries eased some border controls on Monday after coronavirus lockdowns, although Spain kept its borders shut.

NEW YORK

Battered shares of US airlines, casino operators and cruise operators slipped after attempting a rebound in recent weeks. Norwegian Cruise Line Holdings and Wynn Resorts fell 5.4 per cent and 1.9 per cent. The S&P 1500 airlines lost 2.8 per cent. Moderna rose 3.1 per cent after a report said Israel is in advanced talks with the drug developer to buy its coronavirus vaccine.

– Additional reporting: Reuters