European stocks log first weekly drop in eight, Allfunds jumps in debut

(Reuters) – European stocks marked their first weekly loss in eight on Friday as a surge in global coronavirus cases offset optimism about a strong earnings season, while Madrid-based Allfunds jumped on its Amsterdam market debut.

The pan-European STOXX 600 slipped 0.2% and was on course for a 0.8% weekly drop. Defensive plays such as the healthcare sector and consumer stocks were among the biggest decliners, while surging commodity prices lifted miners.

Sentiment was hit following reports on Thursday that U.S. President Joe Biden planned to raise income taxes on the wealthy, a proposal some said would be hard to pass in Congress.

Meanwhile, India reported the world’s highest daily tally of coronavirus cases for a second day and Japan was set to declare “short and powerful” states of emergency for Tokyo, Osaka and two other prefectures as the country struggles to contain a resurgent pandemic.

“We’ve fears of a third wave of infection in many parts of the world. That is going to keep acting as a drag on how far indexes will grow,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

Meanwhile, Spanish fund distribution firm Allfunds jumped more than 20.4% on its first day of trading, boosting an IPO market dented by last month’s underwhelming Deliveroo listing.

Luxury puffer jacket maker Moncler fell 4% after reporting first-quarter sales that were a touch lower than the year-earlier quarter and lagging peers.

About 10% of STOXX 600 companies have reported so far, and 67% of them have topped profit expectations, according to Refinitiv data.

Major regional indexes barely moved after a survey showed the euro zone’s recovery from the pandemic-led economic downturn was much stronger than expected in April.

Italian luxury goods group Tod’s jumped 11.4% after France’s LVMH agreed to increase its stake in the company to 10%.

French media giant Vivendi rose 2.8% as strong performance at its music unit Universal and a sales jump at its publishing division helped its quarterly revenue grow.

Strong results from Finnish firms Metso Outotec and Wartsila, and Paris-listed Groupe SEB saw them top the STOXX 600.

Shares in hygiene products group Essity slumped after JP Morgan said its first quarter results were a miss across the board.

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