(Reuters) – Downbeat economic data that pointed to a stalling of the euro zone recovery hit regional stock markets on Friday, with the pan-European STOXX 600 index marking weekly losses as coronavirus cases rose across the continent.
The German DAX .GDAXI reversed early gains to trade 0.5% lower after Purchasing Managers Index (PMI) surveys showed service sector activity unexpectedly came to a near standstill in August, although factory activity rebounded further.
Paris-listed shares .FCHI fell 0.3% after a worse showing from the French survey, while euro zone blue chips .STOXX50E were down 0.4%.
The opening gains proved short-lived, with the wider STOXX 600 index falling 0.2%, but firmer trading on Wall Street on the back of better data helped limit losses into the close.
“Today’s euro zone PMI release confirms that while activity is on the mend, the pace of the recovery is slowing,” Jai Malhi, a global market strategist at J.P. Morgan Asset Management wrote. “It’s no coincidence that the recovery is losing pace as concerns over new (coronavirus) infections have risen.”
The STOXX 600 recorded a 0.9% loss for the week, with growth-linked cyclical sectors such as banks .SX7P, oil & gas firms .SXEP and automakers .SXAP hit hard as several European countries saw a resurgence in coronavirus cases that raised fears of more restrictions on business activity.
London’s exporter-heavy FTSE 100 .FTSE slipped only 0.2%, supported by a slump in the pound on a mix of bad news on the latest Brexit negotiations and gains for the U.S. dollar. [GBP/] [.L]
Travel and leisure stocks .SXTP were the biggest sectoral gainers, up 3.1%, with France’s Accor (ACCP.PA) and British rival InterContinental Hotels (IHG) (IHG.L) surging for a second day on reports of a possible merger.
Irish building and insulation materials firm Kingspan (KSP.I) jumped 8.9% after its chief executive said the company saw significant pent-up demand post-lockdown.
Swiss drugmaker Novartis (NOVN.S) rose 0.5% after it won U.S. health regulator’s approval to repurpose an 11-year-old blood cancer drug against multiple sclerosis.
Dutch-based payment-processing company Adyen (ADYEN.AS) fell 3.7% as several top executives each sold 15% of their stakes in the company, cashing in 693 million euros ($822 million) in all.
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