By Peter Nurse
Investing.com -- European stock markets were broadly lower Monday, weighed by plans for further lockdowns to combat a third wave of Covid-19 cases, while Turkish stocks and the lira were hit hard after an abrupt change of central bank governor.
At 3:50 AM ET (0850 GMT), the DAX in Germany traded 0.1% higher, while the CAC 40 in France fell 0.6% and the U.K.'s FTSE index dropped 0.4%.
Germany is the latest European country to consider extending restrictive measures, with a draft proposal calling for the current lockdown to be extended into a fifth month. The number of new Covid-19 cases has surged since restrictions were eased three weeks ago.
France, Europe's second-largest economy, announced new restrictive measures late last week, resulting in a month-long lockdown in 16 areas of the country, including Paris.
Adding to the worries, confidence in the safety of AstraZeneca's (NASDAQ:AZN) vaccine has taken a big hit in Spain, Germany, France and Italy, according to a YouGov survey published Monday, after these countries briefly stopped using it on reports of rare blood clots.
The European Medicines Agency regulator said in a preliminary safety review on Thursday that the vaccine was safe and effective, while AstraZeneca has also released data from its U.S. trial, showing that its vaccine was 79% effective in preventing the disease, and 100% successful in preventing hospitalization and death across a sample of 30,000 volunteers. Its stock rose 0.9% Monday.
Turkey is also in focus following President Recep Tayyip Erdogan’s surprise decision over the weekend to replace the hawkish central bank governor Naci Agbal with Sahap Kavcioglu.
The move came two days after a sharp rate hike aimed at controlling inflation near 16% and supporting the lira, and has since seen the Turkish currency weaken almost 12% against the dollar, the sharpest move since August 2018.
Turkey’s benchmark stock index, the BIST 100, fell more than 5% in early trading Monday, while European banks exposed to the country weakened, in particular Spain's BBVA (MC:BBVA), which dropped over 6%.
Travel stocks also suffered on the potential of another German lockdown, with Tui (DE:TUIGn), Lufthansa (DE:LHAG), Ryanair (LON:RYA), easyJet (LON:EZJ) and IAG (LON:ICAG), the owner of British Airways, all down between 4.5% and 6.5%.
Mining stocks also slipped after new anti-pollution measures in China sent iron ore futures tumbling, with Rio Tinto (NYSE:RIO) hardest hit, down 1.4%.
Elsewhere, Suez (PA:SEVI) stock climbed 1.1% after investment funds Ardian and Global Infrastructure Partners offered 11.9 billion euros ($14.2 billion) for parts of its business.
Kingfisher (LON:KGF) stock climbed 3.3% after the home improvement retailer reported a sharp rise in profits, as customers improved their houses during the lockdowns.
Oil prices edged lower Monday, continuing the recent selloff as the fresh lockdowns in Europe increased worries about the speed of recovery of global demand for the commodity.
U.S. crude futures traded 0.5% lower at $61.11 a barrel, while the Brent contract fell 0.4% to $64.28. Both contracts fell by more than 6% last week.
Elsewhere, gold futures fell 0.7% to $1,729.10/oz, while EUR/USD traded 0.1% lower at 1.1900.