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World News

European shares slip as virus cases surge; HSBC, Nokia slump

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

July 8 (Reuters) – European shares opened lower on Wednesday, with banks and energy firms leading the declines as surging coronavirus infections globally dimmed the prospect of a swift economic recovery.

The pan-European STOXX 600 fell 0.5% by 0714 GMT. Banks and energy firms slid more than 1%.

London-listed HSBC fell 3.5% after a report said U.S. President Donald Trump’s top advisers weighed proposals to undermine the Hong Kong currency’s peg to the U.S. dollar. The proposal could possibly limit the ability of Hong Kong banks to buy dollars.

Market sentiment soured overnight on Wall Street as the U.S. coronavirus outbreak crossed a grim milestone of over 3 million confirmed cases on Tuesday, while the World Health Organization acknowledged “evidence emerging” of the airborne spread of the coronavirus.

Finland’s Nokia slumped 6.7% after JPMorgan downgraded its stock to “neutral” on indications of a potential loss of business with U.S. telecoms company Verizon.

Europe’s home appliance maker Electrolux jumped 5.1% after saying that it would report a smaller loss than previously anticipated for the second quarter due to sales growth in June and cost mitigation actions. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

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World News

Greece relocates group of young refugees to Portugal

ATHENS (Reuters) – Greece moved 25 unaccompanied minors from overcrowded migrant camps to Portugal on Tuesday as part of a relocation programme to EU countries.

The boys, all aged between 15 and 17, had lived in refugee camps on outlying Greek islands. They have no relatives in Europe.

Hundreds of thousands of migrants and refugees fleeing conflict and poverty countries used Greece as a springboard to European countries in 2015 and 2016, when an EU-brokered accord with Turkey all but halted the flow, trapping many in Greece.

At least 5,200 migrant children from Syria, Afghanistan, Iraq and Africa currently live in Greece, many of them in harsh conditions.

Tuesday’s transfer was part of a voluntary plan to relocate minors from Greek camps to other European countries amid concerns about the impact of the coronavirus on vulnerable groups.

“Europe is doing its duty for those who have the greatest need, and require protection,” said Irene Agapidaki, special secretary responsible for unaccompanied minors at the Greek migration ministry.

She was speaking from Athens airport after bidding farewell to the children.

Another group of 25 children is expected to fly from Athens to Finland on Wednesday. Greece is in the process of relocating about 1,600 unaccompanied minors who have no family members in Europe. Some have already been sent to other countries

Deputy migration minister Giorgos Koumoutsakos said that in addition to relocating minors, authorities were also pursuing a voluntary return scheme for individuals who were in camps on the Greek islands and who had arrived by Jan. 1 2020.

Koumoutsakos said financial incentives were being offered to those interested in returning home. “We expect the first flight in this complex project to be to Iraq in coming weeks,” Koumoutsakos said.

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Business

European stocks ease from one-month highs as rebound hopes dim

(Reuters) – European shares fell on Tuesday as surging U.S. coronavirus cases and forecasts for a deeper-than-feared recession in the euro zone dimmed optimism around a post-pandemic rebound.

The pan-European STOXX 600 index slipped 1%, falling back from a near one-month high.

Banks .SX7P, which had surged 4% in the previous session tracking a global rally after China moved to prop up its market, fell 1.3%. Travel and leisure .SXTP, real estate .SX86P, and technology .SX8P shares dropped more than 1.5% each.

German drugs and pesticides maker Bayer (BAYGn.DE) slumped 6.9% on news that a U.S. judge questioned a long-negotiated settlement of lawsuits claiming its widely used weedkiller, Roundup, caused cancer.

The European Commission said the 19 nation single currency area would contract by a record 8.7% this year before rising by 6.1% in 2021. In early May, the Commission had forecast a downturn of 7.7% this year and a rebound in 2021 of 6.3%.

“We are taking a more cautious stance because a lot of the assumptions are increasingly priced in as certainties. That is something that worries,” said George Efstathopoulos, a portfolio manager at Fidelity Investments.

“A lot of the improving data are in response to the removal of physical constraints. They don’t really tell us anything about consumption hugely affected by unemployment numbers.”

Several U.S. states posted record daily coronavirus case counts this month, prompting many to reverse reopening plans as U.S. death toll topped 130,000.

French catering and food services group Sodexo (EXHO.PA) dropped 6.9% as it forecast fourth-quarter and half-year sales to fall harder than previously expected due to the impact of the coronavirus pandemic.

Heidelbergcement (HEIG.DE) slipped 1% after the company said a review of its assets had forced it to book an impairment of 3.2 billion euros due to the fallout of the pandemic.

British online fashion retailer Boohoo (BOOH.L) slumped 14.1%, extending losses following a report about dire working conditions in one English factory.

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World News

European shares take a breather, banks lead decline

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

July 7 (Reuters) – European shares slipped on Tuesday as investors locked in gains following a rally in the previous session on China’s move to prop up its market, with surging U.S. coronavirus cases also weighing on the mood.

The pan-European STOXX 600 index slipped 0.7% by 0713 GMT, falling back from a near one-month high.

Retail investors rushed to join an officially sanctioned bull market in China, a major trading partner of Europe, driving Shanghai-listed shares to a five-year high and sparking optimism across global markets on Monday.

Banks, which had surged 4% in the previous session, fell 2%, while energy firms also dragged the market lower as oil prices slid on concerns over a recovery in fuel demand.

Among individual movers, Heidelbergcement dropped 2% after the company said a review of its assets had forced it to book an impairment of 3.2 billion euros due to the fallout of the pandemic.

French catering and food services group Sodexo slipped 1.5% as it forecast fourth-quarter and half-year sales to fall harder than previously expected due to the impact of the coronavirus pandemic. (Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)

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World News

UPDATE 1-European stocks ease from 1-month highs as rebound hopes dim

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* Bayer falls 5%, biggest drag on STOXX 600

* Stocks give up some of previous session’s gains

* Sodexo slides after warning of deeper fall in sales (Adds comment, updates prices)

By Sruthi Shankar

July 7 (Reuters) – European shares fell on Tuesday as surging U.S. coronavirus cases and forecasts for a deeper-than-feared recession in the euro zone dimmed optimism around a post-pandemic rebound.

The pan-European STOXX 600 index slipped 1%, falling back from a near one-month high.

Banks, which had surged 4% in the previous session tracking a global rally after China moved to prop up its market, fell 1.3%. Travel and leisure, real estate, and technology shares dropped more than 1.5% each.

German drugs and pesticides maker Bayer slumped 6.9% on news that a U.S. judge questioned a long-negotiated settlement of lawsuits claiming its widely used weedkiller, Roundup, caused cancer.

The European Commission said the 19 nation single currency area would contract by a record 8.7% this year before rising by 6.1% in 2021. In early May, the Commission had forecast a downturn of 7.7% this year and a rebound in 2021 of 6.3%.

“We are taking a more cautious stance because a lot of the assumptions are increasingly priced in as certainties. That is something that worries,” said George Efstathopoulos, a portfolio manager at Fidelity Investments.

“A lot of the improving data are in response to the removal of physical constraints. They don’t really tell us anything about consumption hugely affected by unemployment numbers.”

Several U.S. states posted record daily coronavirus case counts this month, prompting many to reverse reopening plans as U.S. death toll topped 130,000.

French catering and food services group Sodexo dropped 6.9% as it forecast fourth-quarter and half-year sales to fall harder than previously expected due to the impact of the coronavirus pandemic.

Heidelbergcement slipped 1% after the company said a review of its assets had forced it to book an impairment of 3.2 billion euros due to the fallout of the pandemic.

British online fashion retailer Boohoo slumped 14.1%, extending losses following a report about dire working conditions in one English factory. (Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)

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World News

European stocks pause as virus worries offset rebound hopes

(Reuters) – European stocks paused on Friday after gains through the week as another record surge in U.S. coronavirus cases dulled optimism from a brisk recovery in China’s services sector.

The pan-European STOXX 600 index was largely flat after opening marginally higher, with trading volumes thinned by a U.S. market holiday.

Technology stocks .SX8P led the gains, rising 0.7%, while banks .SX7P, insurers .SXIP and oil & gas .SXEP fell after a strong rally in the previous session.

The benchmark index was headed for a 2.8% weekly gain as hopes of a COVID-19 vaccine and a series of strong data pointed to a global economic recovery from the health crisis.

But investors are skeptical of further gains in equities as the United States set a new daily global record for COVID-19 cases on Thursday, driving several U.S. states to delay their reopening plans.

“The fear of another big(ger) drop in equity prices continues to haunt financial markets. The opportunity to engage in European assets also seems a bit limited,” Thomas Flury, head of FX Strategies at UBS Global Wealth Management wrote to clients.

“For this, clearer signs of a recovery in international trade should be visible. The data on this is constructive, but not surprising to the upside.”

A private survey showed that China’s services sector expanded at the fastest pace in over a decade in June as the easing of lockdown measures revived consumer demand, though companies continued to shed jobs.

Paris’s blue-chip CAC 40 .FCHI slipped 0.3% as French Prime Minister Edouard Philippe resigned ahead of a government reshuffle by President Emmanuel Macron designed to win back disillusioned voters ahead of a possible re-election bid.

Among individual movers, Germany’s Delivery Hero (DHER.DE) jumped 5.5% after the takeaway food company said its order growth nearly doubled in the second quarter.

France’s utility firm EDF (EDF.PA) rose 4.8% after it revised upwards its 2020 nuclear output target.

UK retailer Next (NXT.L) fell 2.5% after Goldman Sachs downgraded the stock to “sell”, while Primark-owner AB Foods (ABF.L) slipped 1.3% after the U.S. bank downgraded its stock to “neutral”.

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Business

Cyclical rally, U.S. jobs data drive European stocks to one-week high

(Reuters) – European shares closed at a one-week high on Thursday as hopes of a COVID-19 vaccine and a better-than-expected rebound in U.S. hiring overshadowed concerns about surging coronavirus infections.

The pan-European STOXX 600 rose 2%, easing slightly from highs hit after data showed the U.S. economy created a record 4.8 million jobs in June as more restaurants and bars resumed operations.

Banks .SX7P were the top gainers in Europe, jumping 4.3% to mark their best day since June 5, while other cyclical sectors such automakers .SXAP, chemicals .SX4P and insurance companies .SXIP gained between 2.5% and 3.4%.

Equity markets started the second half of the year on a positive note earlier this week, as a COVID-19 vaccine developed by German biotech firm BioNTech (BNTX.O) and U.S. giant Pfizer (PFE.N) was found to be well-tolerated in early stage human trials, while business surveys showed a slump in global manufacturing eased in June.

“The market response is likely to be positive, but inevitably tinged with growing concerns that the recovery is already losing steam,” said Seema Shah, chief strategist at Principal Global Investors.

“With the closings having been reversed or paused across 40% of the U.S., July’s job report may paint a much weaker story.”

Raising risks of fresh lockdowns, new U.S. cases of COVID-19 jumped nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day rise since the start of the pandemic.

Further adding to concerns, Britain and the European Union failed to make progress in talks on post-Brexit relations this week due to major differences, officials said.

Among individual movers, Associated British Foods (ABF.L) gained 4.1% after saying trading in its Primark fashion stores that reopened after the lockdown has been “reassuring and encouraging”.

Scandal-hit Wirecard (WDIG.DE) slumped 35.4% after police and public prosecutors raided its headquarters in Munich and four properties in Germany and Austria.

Dutch construction company BAM Groep (BAMN.AS) dropped 11.6% as it warned of a “significant” loss in the first half of the year.

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Business

Cyclical rally, U.S. jobs data drive European stocks to one-week high

(Reuters) – European shares closed at a one-week high on Thursday as hopes of a COVID-19 vaccine and a better-than-expected rebound in U.S. hiring overshadowed concerns about surging coronavirus infections.

The pan-European STOXX 600 rose 2%, easing slightly from highs hit after data showed the U.S. economy created a record 4.8 million jobs in June as more restaurants and bars resumed operations.

Banks .SX7P were the top gainers in Europe, jumping 4.3% to mark their best day since June 5, while other cyclical sectors such automakers .SXAP, chemicals .SX4P and insurance companies .SXIP gained between 2.5% and 3.4%.

Equity markets started the second half of the year on a positive note earlier this week, as a COVID-19 vaccine developed by German biotech firm BioNTech (BNTX.O) and U.S. giant Pfizer (PFE.N) was found to be well-tolerated in early stage human trials, while business surveys showed a slump in global manufacturing eased in June.

“The market response is likely to be positive, but inevitably tinged with growing concerns that the recovery is already losing steam,” said Seema Shah, chief strategist at Principal Global Investors.

“With the closings having been reversed or paused across 40% of the U.S., July’s job report may paint a much weaker story.”

Raising risks of fresh lockdowns, new U.S. cases of COVID-19 jumped nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day rise since the start of the pandemic.

Further adding to concerns, Britain and the European Union failed to make progress in talks on post-Brexit relations this week due to major differences, officials said.

Among individual movers, Associated British Foods (ABF.L) gained 4.1% after saying trading in its Primark fashion stores that reopened after the lockdown has been “reassuring and encouraging”.

Scandal-hit Wirecard (WDIG.DE) slumped 35.4% after police and public prosecutors raided its headquarters in Munich and four properties in Germany and Austria.

Dutch construction company BAM Groep (BAMN.AS) dropped 11.6% as it warned of a “significant” loss in the first half of the year.

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Economy

Britain's debt agency chief says don't rule out UK green bonds

LONDON, July 1 (Reuters) – The head of Britain’s debt management agency said on Wednesday that a discussion on UK green bonds was taking place and just because the country has not yet issued such a bond yet didn’t mean it would not happen.

Green bond issuance has risen sharply in recent years. Germany expected to issue its first green bond in September raising focus on what other prominent countries might follow suit.

Just “because we have not done one does not mean it won’t happen,” Robert Stheeman, Chief Executive of Britain’s debt management office said, during an online panel discussion on sovereign green bonds.

Speaking in the same web conference, Anthony Requin, chief executive at the Agence France Trésor, said that France would probably be in a position in 2021 to consider issuing new green bonds too. (Reporting by Dhara Ranasinghe; editing by Marc Jones)

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World News

EU throws new rule book at Google, tech giants in competition search

Brussels (Reuters) – Exasperated by its failure to loosen Google’s market grip, despite more than $8 billion in fines, the European Union is lining up new rules to level the playing field for rivals.

And just as its landmark privacy law became a global model, the EU’s new regulations could become a template for governments around the world looking to rein in Google (GOOGL.O), Apple (AAPL.O), Amazon (AMZN.O) and Facebook (FB.O).

Driven in large part by a conclusion that multiple antitrust actions against Google have been ineffectual, the EU’s new strategy aims to lay down ground rules for data-sharing and how digital marketplaces operate. “It is indeed to prevent a situation like the ones we have had with the Google cases so that we still would have competition,” the EU’s digital chief as well as its top antitrust enforcer Margrethe Vestager told Reuters last month. Google did not respond to a request for comment. A person close to the firm said the EU legislative push was clearly driven in part by the cases against it.

For despite action for anti-competitive conduct related to Google’s search engine operations, its Android mobile operating system and its advertising business, antitrust enforcers and rivals say they have yet to see more competition.

So as U.S. antitrust enforcers prepare yet another possible case against Google, the EU’s Digital Services Act (DSA) could instead force big tech firms to offer smaller rivals access to data on reasonable, standardized and non-discriminatory terms.

“This is another sign (of) the EU strengthening its leadership in enforcement in these markets and a number of other national competition agencies are following its lead,” said law professor Ioannis Kokkoris at Queen Mary University of London. Some critics worry that the wide-ranging new powers may enable regulators to bypass standards set by EU courts and mix up competition law with politics.

NEW TUNES

Google is not the only company in the EU’s crosshairs.

Another provision targeting unfair contractual terms and practices could affect Amazon and Apple, with the former being investigated for its dual role as a marketplace for merchants and as a competitor, following complaints from traders. Apple is also the subject of four EU antitrust investigations after Spotify complained about alleged unfair curbs placed on rivals to its Apple Music streaming service and the 30% fee for using its in-app purchase system. An e-book rival also faces similar grievances.

On Wednesday, Apple said it had no comment beyond what it said when the EU launched investigations into its App Store and Apple Pay last month and comments by the head of its App Store in Europe who said that the company is not dominant in any market and also faces numerous rivals.

Amazon declined to comment.

Meanwhile, online platforms may also have to do more to take down harmful content and products under the EU plans.

The DSA specifically takes aim at internet advertising businesses that profit from disinformation or false advertising claims, a clear shot at Facebook, which faces an advertiser boycott over its content policies on hate speech. “We support the introduction of a harmonized EU framework for content regulation and we support regulation of illegal and harmful content in the EU,” a Facebook spokesman said.

The proposed new rules reflect a growing recognition that governments need new powers to deal with tech giants, Alec Burnside, a partner at law firm Dechert who has advised several of Google’s competitors in the EU antitrust cases, said. “The general conclusion is that antitrust and regulation both have a role. Antitrust may need to sharpen its tools, but regulation is going to be complementary,” Burnside said. Vestager may also bolster her antitrust playbook by adopting a tool similar to one used in Britain that allows officials to investigate a market and order changes to business practices, without proving any wrongdoing.

Regulators on both sides of the Atlantic regularly share information, although often take different actions based on their respective market conditions and legal regimes.

So while the U.S. Department of Justice investigates big digital technology firms, and is widely expected to bring a case against Google, the tech industry is expected to lobby hard to water down the EU rules, which are in the consultation phase.

Tech lobbying body CCIA in its submission to the Commission on the DSA said any new obligations should be achievable and proportionate to known risks.

Observers expect the rules to be adopted in some form after Vestager delivers a final draft before the end of the year.

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