Oct 28, 2020

European Markets Closing Report: DAX plunges over 4% to lead the sell-off in Europe as Germany, France weigh lockdowns

Elliot Smith

LONDON — European markets plummeted on Wednesday amid reports that Germany and France are preparing new lockdown restrictions to curb a rapid resurgence in coronavirus cases across the continent.

.FTSEFTSE 100FTSE5582.80-146.19-2.551107558647
.FCHICAC 40 IndexCAC4571.12-159.54-3.37162660395

The pan-European Stoxx 600 closed down by 3.1% provisionally, suffering its worst one-day drop since late September. Germany’s blue-chip DAX index led the sell-off, down 4.4%, while France’s CAC tumbled 3.7%. It comes after reports that both countries are set to announce fresh lockdown measures.

German Chancellor Angela Merkel is meeting with state leaders to discuss closing restaurants and bars but keeping schools and nurseries open, while French President Emmanuel Macron will give a TV address this evening to announce further curbs on movement, Reuters reported Wednesday.

New Covid-19 cases, hospitalizations and deaths have continued to surge across Europe and the U.S. in recent days, prompting further restriction measures in many countries.

Mainland China also reported its highest number of daily new cases for more than two months on Wednesday, while the U.S. is seeing record cases and hospitalizations in parts of the Midwest.

On Wall Street, stocks fell sharply — following their European counterparts — as investors worried that the latest increase in coronavirus infections could halt the global economic recovery.

In vaccine news, Pfizer said Tuesday that data from a late-stage trial of its vaccine developed alongside Germany’s BioNTech will likely not be available until after the Nov. 3 U.S. election, while EU officials have said vaccines are unlikely to be available across Europe until 2022, according to Reuters.

Meanwhile, U.S. President Donald Trump on Tuesday acknowledged that there will be no coronavirus relief bill before election day, with the White House and congressional Democrats still embroiled in protracted negotiations.

On the earnings front, Deutsche Bank on Wednesday reported a net profit of 182 million euros ($214 million) for the third quarter, surpassing expectations to swing back to profit as Germany’s largest lender looks to emerge from the coronavirus crisis. The bank’s shares were marginally lower.

Looking at individual stocks, French IT consultancy Sopra Steria dropped more than 13% to the bottom of the Stoxx 600 after a weak third-quarter trading update.

At the top of the European blue chip index, British airplane engine manufacturer Rolls-Royce soared over 13% after investors backed a funding round to help the company weather the pandemic.

- CNBC.com staff contributed to this report.

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