(C) Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt
By Sruthi Shankar
(Reuters) – European stocks on Monday were weighed down by a slump in Turkey’s currency and worries about more restrictions due to rising coronavirus cases in the continent, but strength in automakers helped limit the losses.
The pan-European STOXX 600 fell 0.2%, but recouped some of the early losses.
The global mood soured as the Turkish lira plunged to a near record low after President Tayyip Erdogan replaced a hawkish central bank governor with a critic of high interest rates over the weekend.
“I don’t think it’s going to have a lasting impact on markets. Formerly when the lira spun out of control, it has had an impact on a couple of euro zone banks with exposure to the country,” CMC Markets’ David Madden said.
“It might just increase the overall risk-off sentiment. Stock markets were turning over at the back-end of last week even before this.”
European stocks saw sharp falls on Friday, easing from a one-year peak as renewed lockdowns in France and concerns over the pace of vaccination drives hit sentiment, with the European Union threatening to block exports of COVID-19 vaccines to Britain.
A British minister warned on Monday that Britons should wait before booking summer holidays abroad, pointing to rising COVID-19 infection rates in Europe.
The wider travel & leisure sector fell 1.4%, with Germany set to extend a lockdown to contain the COVID-19 pandemic into its fifth month.
However, another day of gains for automakers limited market losses, with the sector rising for a fifth day in the past six sessions.
Volkswagen AG (OTC:VWAGY) jumped 5% after Deutsche Bank (DE:DBKGn) raised its price target on the stock to 270 euros from 185 euros after the company’s ambitious plans to shift to electric car market.
British home improvement retailer Kingfisher (LON:KGF) rose 4.5% after it reported a 44% jump in full-year profit, driven by the popularity of do-it-yourself projects.
Turkey-exposed banks, travel stocks weigh on Europe
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