European markets plummeted on the last day of the month, quarter, and first half of 2021, as investors shifted their attention away from optimistic inflation statistics and onto concerns over a contagious COVID-19 disease. Stock futures in the United States were also under pressure. The Stoxx Europe 600 index SXXP, -0.46 percent fell 0.6 percent to 453.77 points. The index increased by roughly 13% in the first half of the year, 5% in the second quarter, and slightly over 1% in the month. The German DAX DAX, -0.77 percent and the French CAC 40 PX1, -0.60 percent also lost over one percent, while the FTSE 100 index UKX, -0.47 percent dipped 0.6 percent.

In a note to clients, Joshua Mahony, senior market analyst at IG, wrote, “Travel stocks are extending their losses after a period of downward pressure, with the likelihood of heightened travel restrictions denting prospects of a late summer boost to business.” “Growing fears that mounting delta variant instances could soon place the United Kingdom on the banned list for many overseas destinations,” warned Mahoney, dragging shares like Carnival CCL, -0.48 percent and TUI TUI, -0.05 percent lower. The delta variation is responsible for the bulk of infections in the United Kingdom and is spreading to other nations, raising concerns that it could stall the worldwide recovery. Read about how different countries are dealing with Delta variation hotspot arrivals. Negative mood expanded to U.S. stock futures ES00, -0.04 percent YM00, -0.06 percent NQ00, +0.01 percent, which were all down ahead of the ADP private-sector hiring report, which comes ahead of Friday’s crucial jobs report. After encouraging statistics, the S&P 500 SPX, +0.03% and Nasdaq Composite COMP, +0.19% closed Tuesday’s session in record territory. According to a flash estimate from Eurostat, consumer prices in Europe fell to 1.9 percent in June from 2 percent in May. The annual surge in inflation was driven by energy prices, which increased by 12.5 percent year over year. In a statement to clients, Willem Sels, chief investment officer, private banking and wealth management at HSBC, warned investors not to become complacent about inflation in the region. By the end of the year, he expects the headline number to reach 2.8 percent before starting to fall. “While oil and other commodities will become less of an inflation driver this year, low inventories of industrial goods mean that goods price inflation will persist until companies replenish their stock, which might take many months,” Sels added. “And, in the services sector, the current pricing pressure we’re all feeling when trying to book a staycation or visit our favorite restaurants will last until later this year, when labor supply catches up with demand.” Banks were among the worst performers in Europe, with shares of HSBC HSBC, -1.16 percent HSBA, -1.08 percent, BNP Paribas BNP, -1.27 percent, and Banco Santander SAN, -0.76 percent SAN, -1.02 percent all falling by more than 1%. Automobile manufacturers were also under pressure, with Porsche Automobil Holding PAH3, -4.45 percent down 4.4 percent and Volkswagen VOW3, -2.20 percent VOW, -2.68 percent down 2.5 percent. Acciona Energia aimed for a market valuation of roughly 8.8 billion euros ($10.47 billion) in its first public offering, which was priced at the lower half of an expected range. The IPO will be priced at EUR26.73 per ordinary share, according to the renewable energy firm, which is owned by Spain’s Acciona SA ANA, -1.33 percent. Acciona’s stock dropped 1.4 percent.

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