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Europe open: Shares lower as investors fret over new Covid wave

Tue 23 March 2021 08:13 | A A A

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(Sharecast News) - European shares opened lower on Tuesday as Germany confirmed an extended lockdown into Easter as it tried to combat the third wave of Covid-19 infections currently spreading across the Continent.

The pan-European Stoxx 600 index was down 0.6% at 0825 GMT, with all major regional bourses marking similar declines.

Germany extended its lockdown for three weeks, said Chancellor Angela Merkel after talks with regional leaders. Current measures would remain until April 18, with restrictions will be even tougher from April 1-5, when most shops will be shut and gatherings will be limited.

"Yesterday was a reminder, if any were needed, that for all the optimism over the vaccine program, it is only as strong as its weakest link, and that link is currently in Europe, with Germany this morning imposing a five-day lockdown over the Easter period in an attempt to stem the pace of transmission," said CMC Markets analyst Michael Hewson.

"This presents a problem for the travel sector and the potential for a speedy recovery, given the slow nature of the rollout due to supply, as well as hesitancy concerns. When set against rising infection rates across Europe, it is likely to mean that even in the event of a successful rollout in the UK, it's highly unlikely that international travel will be able to return in any meaningful way while a large part of Europe remains behind the curve in inoculating its populations."

Travel stocks slid on the news, exacerbating falls from Monday. Cruise line group Carnival was lower, along with airport and train station food outlet operator SSP, British Airways owner IAG, budget airline easyJet and Ryanair.

Shares in Swedish truckmaker Volvo slumped 6.7% after the company warned a shortage of semiconductors would have a substantial impact on second quarter production.

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