European Shares Slump Nearly 2% on Covid Concerns; Tobacco Stocks Tumble

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  • European markets followed a pattern of uncertain sentiment around the world amid rising Covid-19 cases in multiple countries.
  • British American Tobacco led a decline in tobacco stocks after a report that the Biden administration is considering whether to cap nicotine levels in cigarettes.
  • On the data front, U.K. unemployment fell unexpectedly for a second consecutive month to 4.9% in the period to the end of February.

LONDON — European stocks finished in negative territory on Tuesday with global markets all showing lackluster sentiment.

The pan-European Stoxx 600 ended the session down by 1.9%, with travel and bank shares both dropping 3.7% to lead losses as all sectors and major bourses declined.

European markets are following a pattern of uncertain sentiment around the world as rising Covid-19 cases in multiple countries resurface concerns about stock valuations. India, which has seen a resurgence in cases of late, reported more than 200,000 infections for the sixth consecutive day Tuesday.

On Wall Street, stocks fell for a second day on Tuesday as strong corporate earnings failed to boost a market already near record highs. Earnings season continues in the U.S. Tuesday with streaming giant Netflix set to report after the bell.

Meanwhile, shares in Asia-Pacific were mixed in Tuesday trade as China kept its benchmark lending rate unchanged, with Japanese stocks leading losses among the region's major markets.

Investors in Europe are keeping an eye on earnings reports in the region. Danone posted a 3.3% fall in first-quarter sales but maintained its goal of returning to profitable growth in the second half of the year. The French food group's shares slid 1.8% by the close.

AB Foods shares fell 5.9% after adjusted operating profit almost halved from the same period last year.

British American Tobacco slumped 7.6%, leading a broad decline for tobacco companies after a report that the Biden administration is considering a requirement for reduced nicotine content in all cigarettes sold in the U.S. Imperial brands also fell 7.3%.

At the bottom of the European blue chip index, Austrian chipmaker AMS plunged 12.9% after a media report that it lost some business from U.S. tech giant Apple, while Swiss Re slid 7.5% after entering into a partnership with Veoneer to advance assessment and development of ADAS technology.

On the opposite end of the pan-European benchmark, Czech antivirus software maker Avast rose 1.3% after a promising first-quarter trading update.

On the data front, U.K. unemployment fell unexpectedly for a second consecutive month to 4.9% in the period to the end of February, despite tight nationwide Covid-19 lockdown measures, the Office for National Statistics figures showed Tuesday.

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