European stocks drop at open on fresh virus fears

Jul 14, 2020: European stock markets fell at the open on Tuesday, mirroring losses in Asia, as fears resurfaced over a spike in coronavirus infections around the world, dealers said.

In initial deals, London's benchmark FTSE 100 index of major blue-chip companies sank 0.7 percent to 6,130.25 points compared with Monday's closing level, impacted also by news of virus-hit UK economic activity.

In the eurozone, Frankfurt's DAX 30 index lost 1.4 percent to 12,621.96 points and the Paris CAC 40 shed 1.5 percent to 4,981.03.

"A late sell-off on Wall Street spilled over into Asia and is dragging on European stocks," said City Index analyst Fiona Cincotta.

"Sentiment soured on Wall Street after the state of California imposed new restrictions on business as coronavirus cases spiral out of control and hospitalisations soar.

"The shutdown fuels fears that the growing number of coronavirus cases will hamper the fragile economic recovery.

A worrying increase in new cases across the planet has forced governments to revert to measures aimed at preventing the disease's spread.

California, the richest of the US states, ordered all indoor restaurants, bars and movie theatres to re-close, while churches, gyms, shopping malls, hair salons and non-essential offices have been told to shut up shop in several densely populated counties, including Los Angeles.

The measures follow new restrictions imposed in Texas, Arizona, Florida and other major states.

Meanwhile, Hong Kong on Monday announced sweeping new measures as the city suffers a relapse. Melbourne is already under a new lockdown and there are signs of new outbreaks in Sydney.

The new spikes come as WHO chief Tedros Adhanom Ghebreyesus warned: "There will be no return to the 'old normal' for the foreseeable future."

He added that without governments adopting a comprehensive strategy, the situation would get "worse and worse and worse".

AFP/APP