(Reuters) – European shares started the week sharply lower, gripped by investor concerns over energy supply crunch, while rising COVID-19 cases in China and the discovery of a new coronavirus variant dented commodity-linked stocks.
Nord Stream I, the biggest single pipeline carrying Russian gas to Germany, starts annual maintenance on Monday. Flows are expected to stop for 10 days, but governments, markets and companies fear the shut-down might be extended due to war in Ukraine and could disrupt plans to fill storage for winter.
The pan-European STOXX 600 index broke a three-day winning streak to drop 1.1% by 0712 GMT, after posting its best week in seven on Friday.
All major European sectors were in red, led by a 3.5% fall in miners. Luxury stocks, which derive a chunk of their demand from China, slipped with LVMH losing 2.8%. [MET/L] [IRONORE/]
Asian markets slipped as COVID-19 cases in Shanghai rose, while Omicron BA.5.2.1, a new subvariant was also discovered in the city. Markets worried about the likelihood of yet another round of curbs to prevent the spread of the virus, which could again hurt economic growth in the world’s second-largest economy.
The euro approaching parity with the dollar also added to investor worries about the hit to earnings as second-quarter results start to pick up pace. [FRX/]
Danske Bank dropped 6.1% after the lender reduced its full-year net profit outlook, hurt by rapidly rising interest rates and unfavourable financial market conditions.
(Reporting by Susan Mathew in Bengaluru; Editing by Sherry Jacob-Phillips)
