Irish shares hit as fears of new German Covid-19 lockdown haunt markets

The darkening outlook is a reality check for the market, which had largely put behind the risk of Covid-19
Irish shares hit as fears of new German Covid-19 lockdown haunt markets

The street leading to the Brandenburg Gate in Berlin, Germany. File Picture: Christophe Gateau/DPA via AP

The prospect of widespread Covid-19 lockdowns is casting a pall over European stock markets again - with shares in the Irish banks, Ryanair, and Dalata Hotel Group falling on fears of a new round of health restrictions to travel, tourism, and hospitality.

Traders piled into haven assets and pushed back their expectations for interest-rate hikes after Austria announced a nationwide lockdown starting on Monday. Germany’s health minister refused to rule out closures in the country, weighing on investor expectations for a post-pandemic recovery.

The darkening outlook is a reality check for the market, which had largely put behind the risk of Covid-19. 

Traders had been focusing instead on the economic recovery as vaccines proliferated and pandemic restrictions were lifted, piling pressure on central banks to act fast to tackle rising prices.

“Markets are progressively realising and acknowledging that the picture is worsening, especially across the eurozone,” said Roberto Mialich, a strategist at UniCredit. 

“Some profit taking and position paring had emerged yesterday, but today Covid-19 concerns are prevailing.” 

 The price of crude oil tumbled by 3% to $78.80 a barrel in morning trade on the prospect of curtailed demand across Europe should lockdowns be imposed in the largest economies.

- Bloomberg & Irish Examiner

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