(Sharecast News) – European shares were clinging on to positive territory at lunchtime on Monday morning, as tech stocks found favour among investors, while the prospect of extended Covid lockdowns on the continent battered travel and leisure companies.
The pan-European STOXX 600 index rose 0.9% in early trade. Investor optimism was tempered by tougher lockdowns and the emergence of new strains of the coronavirus from South Africa and Brazil appearing in the UK and Germany respectively.
London’s FTSE 100 was 0.39% lower as the government was atypically blunt about the date of any relaxation of lockdown measures, with reports suggesting measures could continue into the summer until all people over the age of 50 receive vaccine jabs.
“The pandemic continues to eat away at confidence – now the British government is said to be considering extending lockdown for another three months beyond Easter. This is to get the second dose of vaccines to all over-50s, but just extends the pain for everyone, particularly travel stocks as it’s starting to appear as though as another peak summer season will be affected by Covid restrictions,” said Markets.com analyst Neil Wilson.
Further pain was inflicted as President Joe Biden was set to announce a travel ban on those countries where new variants have emerged.
In Germany, a survey showed business morale fell more than expected in January as a second wave of Covid-19 halted a recovery in Europe’s largest economy. Germany’s DAX index was down 0.19%.
Apple, Microsoft and Facebook all have results out this week, along with American Express, Boeing, Tesla and McDonald’s.
In equity news, Dutch technology investor Prosus led the gainers with a 5.28% rise, while compatriot health technology company Philips rose 2.3% as it reported a 7% increase in fourth-quarter core profit.
Shares in Siemens Energy rose after the company swung to a first quarter core profit.
On the downside, the lack of any vision on a recovery from the pandemic continued to batter travel stocks, with aircraft engine maker Rolls-Royce down 4.4%.
Budget carriers easyJet and Ryanair were both down by more than 5%, while cruise ship operator Carnival, holiday operator TUI, Trainline, Accor and Frankfurt airport operator Fraport were also in the red.