European Shares Retreat As China Covid Cases Surge

Business

European stocks tumbled on Tuesday, as investors assessed the impacts of the latest Covid-19 resurgence in China as well as a looming conflict between Beijing and Washington over the former’s support for Russia’s invasion of Ukraine.

China’s worst Covid-19 outbreak since the initial wave of the pandemic worsened Tuesday with a major factory city ordering production halts.

Anxiety over the war in Ukraine and the outlook for higher interest rates also kept investors on edge ahead of this week’s Federal Reserve meeting.

The pan European Stoxx 600 dropped 1.8 percent to 428.34 after climbing 1.2 percent on Monday. The German DAX and France’s CAC 40 index both fell around 1.9 percent, while the U.K.’s FTSE 100 was down 1.4 percent.

Sweden’s H&M, the world’s second-biggest fashion retailer, dropped 2.4 percent. The company reported a 23 percent rise in first quarter sales, matching market expectations.

Tobacco and nicotine products maker Swedish Match slumped 6.5 percent after providing an update on its plans for separation of its U.S. cigar business.

Dutch technology investor Prosus, which holds a 29 percent stake in the Chinese tech giant Tencent, plummeted 10 percent as the Chinese tech sell-off continued unabated.

Miners Anglo American, Antofagasta and Glencore lost 3-4 percent in London as base metal prices plunged.

Oil & gas firm BP Plc tumbled 3 percent and Royal Dutch Shell declined 2.2 percent as oil extended declines to fall below $100 a barrel.

Tobacco form Imperial Brands fell about 1 percent after issuing an update in view of the Russian-Ukraine conflict.

Automotive firm Inchcape declined 2.6 percent after saying it has started a process to transition its business in Russia.

German utility RWE fell more than 2 percent after flagging major business risks.

Wacker Chemie jumped almost 5 percent. The chemicals company reported that its fiscal 2021 net income surged to 828 million euros from last year’s 202 million euros.

Volkswagen gave up 1.2 percent after saying it had sold 2 million fewer cars than planned last year due to the semiconductor shortage.

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