January 16, 2021

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Concerns about the mutation of British viruses are battering equity markets

Concerns about the mutation of British viruses are battering equity markets

(Archive image)

Photo: BELGA

European stock markets collapsed Monday on concerns about a new contagious variant of the corona virus and the lack of a breakthrough in Brexit negotiations. An agreement in Washington on additional corona support for the US economy could not turn the tide.

The Bel 20 was almost 3.8 percent lower around noon. Shortly after opening, it fell by 2 percent.

The Dutch AEX index fell by 3.4 percent to 603.92 points around noon. The stock exchanges in Frankfurt and Paris fell to 3.8 percent. The main index in Madrid fell 3.9 percent.

London lost 2.9 percent and the British pound was also under pressure. Stricter corona measures have been put in place in part of the UK due to a new variant of the coronavirus that can spread faster.

Banks

The European aviation sector was particularly hard hit. Various countries, including Belgium, have decided not to allow aircraft from the UK for the time being for fear of importing the virus mutation. The Air France-KLM aviation combination fell 7 percent. In Frankfurt, Lufthansa, the parent company of Brussels Airlines, lost 6 percent and the low-cost airlines Ryanair and easyJet fell 6 and 11 percent in London. IAG, the parent company of British Airways and Iberia, lost nearly 11 percent. The travel agency TUI and the cruise company Carnival fell to 9.7 percent.

The main disruptors on the Brussels Stock Exchange are ING Group (-6.7 percent) and KBC (-5.1 percent). According to business newspaper De Tijd, investors fear that problem loans will rise now as the current virus outbreak cripples the economy again. On Friday, the National Bank also asked financial institutions to limit dividends until October. Companies like Kinepolis and AB Inbev, which have been hit hard by potentially long lockdowns this winter, are also losing hard.