COVID Comeback – A new Threat for European Market Bulls

COVID-19 lockdowns have returned anew to haunt Europe’s economic prospects, forcing investors on Friday to reassess portfolios and sell vulnerable assets such as the euro and bank stocks.

Days after the Netherlands, Hungary, Slovakia and the Czech Republic reimposed curbs, Austria put itself back under lockdown and Germany’s health minister refused to rule out one.

Markets were little soothed by Germany’s foreign minister ruling out a lockdown and mandatory vaccinations for all to tabloid Bild.

The developments upended the buoyant mood in European equity markets where French and German shares had hit a string of record highs, thanks to a strong earnings recovery.

A pan-European equity index, up 80% from March 2020, slipped half a percent on Friday.