The European stock exchanges are trying to recover after the sharp drop in yesterday’s session, Monday 28 June. After the mixed closure of Wall Street, with the Nasdaq and the S & P500 remaining at record levels, the Tokyo Stock Exchange ended its trading in sharp decline, on fears related to the spread of the Delta variant.
The Delta variant
On the market, the growth of infections in Great Britain is perceived with a mixture of fear and serenity. Mix that sums up Goldman Sachs well, in a note written yesterday: «The diffusion of the Delta variant in Europe raises concerns that there may be slowdowns in the reopening of economies. Using our models, the danger of increased infections between late summer and winter is real. That said, however, our analyzes suggest that the risk of a steep jump in hospitalizations has dramatically decreased thanks to increasing vaccine immunization. This is why we believe that the danger posed by the Delta variant is still manageable ».
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Yesterday this clearly penalized all stocks in the travel, tourism and holidays sector. Negative variations reached over 6-7% for groups like Tui (-7.8%) or Carnival (-6.6% in the European evening), but they also exceeded 4-5% for many airlines such as EasyJet (-5.8%), Ryanair (-4.3%) and Air France-KLM (-4.1%). We’ll see if the rebound will be triggered today or not.
Europe penalized
The other effect caused by the fear for the Delta variant concerns the divergent trend of the European stock exchanges compared to the American ones: the former did much worse on Monday. This is because in the American ones, technological stocks have a greater weight (which benefit from lockdowns), while in European ones the greater weight goes to cyclical stocks (which instead suffer a resumption of the pandemic). It is no coincidence that the Nasdaq did very well on Monday, breaking the historical record.
Nikkei closes down 0.81%, the Delta variant worries
Weak session for Japanese shares weighed down by the fall in cyclical stocks, thanks to the spread of the Delta variant of Covid-19 which raises concerns for a recovery in the global economy. Thus, at the end of trading, the Nikkei index of leading stocks lost 0.81% to 28,812 points and the broader Topix index fell 0.85% to 1,949.02 points.