FTSE 100 welcomes May on a dovish note as U.S accuses China of COVID-19

The European stocks welcomed May on a dovish note on Monday attributed to the rising complications between the U.S and China. The United States’ accusation of misleading information about the Coronavirus on China weighed heavily on cyclical sectors. In a recent statement, President Trump also threatened to impose new tariffs on Chinese goods.

The UK’s blue-chip index, FTSE 100, was reported 0.7% down in the early session on Monday that further extended Friday’s decline of roughly 2.3%. At 5,746, the FTSE 100 index is currently around 25% down year to date. The index dropped to as low as 4,993 in late-March.

Rolls-Royce posted the steepest decline of 4.2% on the FTSE 100 after the British aero-engine manufacturer said it was considering to slash its workforce by 15%.

FTSE 250 declines 1.7% on Monday

The mid-cap FTSE 250 index that focuses primarily on domestic companies was seen trading 1.7% down on Monday. At 15,910, the FTSE 250 index is also more than 25% down year to date after dropping to as low as 12,829 in March.

Sectors that are known to respond aggressively to economic growth like automakers .SXAP, oil and gas .SXEP, and banking .SX7P posted a significant decline of around 5%.

Germany’s ThyssenKrupp plunged by a massive 16.4% as the company sold its elevator business but said that the sale was insufficient to avoid the prospect of a new financial squeeze ascribed to the ongoing health crisis.

Among other prominent market movers was Roche that climbed 0.3% after the FDA gave the emergency use authorization for its antibody test. The company also plans on investing over £352 million for COVID-19 testing in a German site.

Spain’s Telefonica also climbed roughly 2.9% on Monday as the company said that it was negotiating with Liberty Global for a potential merger of UK’s O2 mobile operator and Virgin Media.

European stocks hit a 2-month high last week

The pressure was evident on other indices as well with STOXX 600 printing a 2.3% decline while the Eurozone shares (.STOXXE) were seen about 3% down. Last week, however, the European stocks had touched a 2-month high.  

In Germany, on the other hand, DAX slumped 3.1% while CAC 40 in France tanked 3.6% as Renault and PSA lost traction in the stock market on a report that car registrations dropped 89% last month in France.