3 Minutes to Read (Click LIVE/ or type LIVE/ in a news window for a Reuters live blog on U.S., UK, and European financial markets.) * Auto and tourism stocks are leading declines* Mining firms are among the few gainers as metal prices rise* Tech stocks are following their Chinese peers lower on expectations of a crackdown* In the takeover war, Morrisons reaches an almost eight-year high (Adds comments; updates prices) Reuters, July 5 – On Monday, European stocks fell below record highs as the global spread of the Delta strain of the new coronavirus prompted fears of a slowed economic recovery, though Morrisons rose as a takeover war for the British retailer heated up. The STOXX 600 index fell 0.3 percent throughout Europe, with car and airline stocks among the largest losers. After a U.S. jobs report last week indicated that the domestic economic upswing remained strong but did not require an immediate withdrawal of monetary stimulus, mining equities were among the few gainers, rising 0.9 percent and matching metals prices. Following a record close for U.S. equities on Friday, the data sent Asian markets to an all-time high early in the session. “As the Delta variation undermines the narrative of a smooth, unhindered recovery from here,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, said, “European markets may very well be becoming cautious sooner (than US markets).” “It will be fascinating to see if the (European Central Bank) weighs in on these issues and perhaps goes on to set symmetric inflation goals, with some wiggle room in either direction.” The benchmark STOXX 600 index has struggled to recapture an all-time high set in mid-June as an increase in virus cases raised the prospect of new travel restrictions, while a recent spike in inflation has fueled fears of a rapid reduction of monetary stimulus, despite ECB assurances to the contrary. Following the central bank’s decision to keep its policy unchanged last month, ECB President Christine Lagarde said on Friday that the euro zone economy was starting to recover from the pandemic’s effects, but that the recovery was still fragile. On Monday, all eyes will be on the EU’s economic activity figures for June, which will be released at 0800 GMT. French stocks slumped 0.4 percent as Health Minister Olivier Veran warned that the Delta type might trigger a fourth wave of the epidemic in France. Technology stocks fell 0.5 percent, matching a drop in Chinese counterparts, as investors worried about Beijing’s crackdown on Didi Global, the country’s largest ride-hailing company, and investigation of other platform companies. Morrisons’ stock rose 11.4 percent to a near eight-year high after Apollo Global Management, a private equity firm based in the United States, indicated it was considering a bid for the British supermarket chain. Morrisons and another business agreed on a 6.3 billion pound ($8.7 billion) merger on Saturday. With US markets closed for the long Fourth of July weekend, trading volumes are expected to be low. Sagarika Jaisinghani contributed reporting from Bengaluru, while Shounak Dasgupta and Uttaresh.V. edited the piece./n
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