By Geoffrey Smith
Investing.com — Europe’s stock markets fell sharply on Friday as the U.K.’s decision to impose a 14-day quarantine on travelers returning from France and the Netherlands underlined the risks of a second wave of Covid-19 infections across the continent.
Together with political instability in Belarus that has prompted speculation about possible Russian intervention, and the confirmation of a record 12.1% drop in eurozone GDP for the second quarter, the news is ensuring that the week ends on a sour note.
By 7:45 AM ET (0945 GMT), the benchmark was down 1.7% at 366.34, on course to wipe out all its gains for the week. Tellingly, the worst affected among national stock markets was Poland’s.
Poland’s benchmark index fell 2.8% after Svetlana Tikhanouskaya, who was forced into exile by Belarusian security services after claiming victory in last weekend’s presidential election, appealed to local authorities across the country to sign a petition supporting her claims of ballot fraud.
Earlier Friday, Margarita Simonyan, editor-in-chief of controversial Russian TV channel RT, had tweeted that the time was ripe for “some polite people to restore order”, in a deliberate echo of the phrase that Russian President Vladimir Putin had used to describe the troops he sent to Ukraine in 2014.
A rerun of what happened in Ukraine in 2014 is the last thing markets need right now, when the threat of a generalized second wave of Covid-19 cases across Europe appears to be rising.
The U.K. decided late on Thursday to require all travelers returning from France, the Netherlands and a handful of smaller states with rising infection numbers to quarantine on their return. There are around 500,000 Brits currently on vacation in France, according to The Times. The news ensured that the and both lost over 2% by mid-morning in London, with travel names hit hardest.
EasyJet (LON:) stock, Dart Group (LON:) stock and IAG (LON:) stock all fell by more than 6%, while Air France KLM (OTC:) stock fell 4.9% and hotel operator Accor ‘s (PA:) stock fell 3.1%.
The news was compounded by France’s junior European affairs minister Clement Beaune tweeting that France would “reciprocate”, suggesting that Paris saw the move as a diplomatic affront rather than a public health measure.
France has seen its numbers of new cases more than double in two weeks, leading Prime Minister Jean Castex to say that the country was “going the wrong way”. German health officials have expressed similar fears about their own case numbers, while the Netherlands, too, has seen a sharp rise in cases. While outbreaks have generally been localized, one has been in the tourist hotspot of Amsterdam – a factor that goes some way to explaining the U.K.’s extending the quarantine requirement to travelers returning from there.
Whether Britons will observe a fresh quarantine imposed by a Prime Minister whose chief adviser notoriously flouted the last lockdown in March is another question – and one without any reassuring answers for U.K. stocks.
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