UPDATE 2-SAP drags down German shares, COVID-19 worries weigh on broader Europe

  • Reuters
  • Economic Indicators News
UPDATE 2-SAP drags down German shares, COVID-19 worries weigh on broader Europe
Credit: © Reuters.

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)

* German DAX closes at lowest in almost 4 months

* SAP cutting its 2020 outlook, posts worst fall in 24 years

* SAP's pessimism dents hopes of global recovery - analyst

* Oil drop pressures energy stocks

(Updates to close)

By Sruthi Shankar and Susan Mathew

Oct 26 (Reuters) - German shares closed at their lowest in nearly four months on Monday as Europe's most valuable tech firm, SAP SAPG.DE , experienced its worst trading day in 24 years after cutting its 2020 outlook.

The German DAX DAXI fell 3.7% as SAP SAPG.DE slumped almost 22% after abandoning medium-term profitability targets and cautioning that its business would take longer than expected to recover from the pandemic hit. pessimism does not bode well for hopes for the global economic recovery to continue," said Edward Moya, senior market analyst at OANDA, New York.

"If tech goes, the deteriorating outlook due to virus spread will likely yield massive risk aversion as investors head for the sidelines instead of rotating into cyclicals."

The wider European tech index .SX8P slid 7.4%.

SAP's results came as a blip in the third-quarter earnings season, which has been largely better than feared.

Meanwhile, fresh COVID-19-induced restrictions in Italy and Spain to curb a resurgence in cases weighed on the rest of Europe, with the pan-European STOXX 600 index .STOXX closing at a one-month low, down 1.8%. on Saturday became the second region after Latin America to surpass 250,000 deaths, according to a Reuters tally. euro zone blue-chip index .STOXX50E fell nearly 3%, while Europe's travel and leisure sector, worst hit by the movement curbs, was down 3.3%.

Nick Nelson, head of European equity strategy at UBS, said the Swiss bank's target for STOXX 600 into the year-end is 340 points, about 4.5% below the current level, in part due to the impact of the latest round of restrictions.

Surveys of euro zone purchasing managers last week showed economic activity slipped back into decline in October, heightening expectations for a double-dip recession as a second wave of virus sweeps across the continent. risk appetite was sapped by worries over slow progress on a new U.S. stimulus bill and a looming presidential election. MKTS/GLOB

Milan's blue-chip index .FTMIB fell 1.8% even as ratings agency Standard and Poor's upgraded Italy's sovereign outlook to stable from negative. majors Total TOTF.PA and Royal Dutch Shell RDSa.L fell over 2.8% as crude prices slumped more than 3% on demand worries. O/R

Healthcare stocks .SXDP remained supportive, with AstraZeneca AZN.L gaining 1.7% after it resumed the U.S. trial of its experimental COVID-19 vaccine. stocks .FCHI dipped 1.9%. Turkish leader Tayyip Erdogan asked his compatriots to stop buying French goods on Monday in the latest expression of anger in the Muslim world over images being displayed in France of the Prophet Mohammad, which some Muslims consider blasphemous.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100