European markets in response to investors’ reaction to Macron’s victory in France

LONDON (AP) — European stocks closed sharply lower on Monday as concerns about a resurgence of COVID-19 cases in China overshadowed the re-election of French President Emmanuel Macron.

The pan-European Stoxx 600 index closed down 1.8% provisionally with almost all sectors in negative territory. Basic resource stocks, with their heavy exposure to China, were the worst performers in the index, with the sector falling 5.9%.

The negative trading in Europe comes after Asia-Pacific markets fell sharply on Monday following a sell-off on Wall Street on Friday. Mainland Chinese indices led the losses. The Shenzhen component and the Shanghai composite fell more than 6% and 5%, respectively.

Asian markets are also hit by the wave of covid in China, as the world’s second-largest economy struggles to contain its worst outbreak of the virus despite harsh lockdowns in its largest city, Shanghai. Over the weekend, Beijing warned that the virus has been spreading undetected for about a week.

Meanwhile, US stocks fell at the open, continuing an April market sell-off that has pushed the Dow Jones Industrial Average lower for four straight weeks.

Wall Street traders are bracing for a packed week of earnings, including reports from major tech companies like Amazon and Apple.

Risk appetite has taken a noticeable hit and stocks continue to head south. News of partial lockdowns in Beijing as infection rates accelerate in the capital appear to be focusing attention on downside risks to growth, even as policymakers in the developed world continue to grow strongly.

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European investors continue to monitor developments in Ukraine as the Russian invasion of the country entered its third month on Sunday. The conflict that has killed thousands and led to the worst refugee crisis Europe has seen since World War II.

The war will end only if Russian troops completely withdraw from the country, Ukrainian Prime Minister Denys Shmyhal has said.

Shares in Dutch health technology company Philips fell more than 11% after the company reported a sharp drop in first-quarter core earnings.

At the top of the Stoxx 600, shares of Ubisoft rose 9.5% after Bloomberg reported that the French video game publisher has attracted acquisition interest from private equity firms Blackstone and KKR.

“We do not comment on rumors or speculation,” a Ubisoft spokesperson told CNBC.

Ubisoft is “in an ideal position to capitalize on the rapid industry growth and platform opportunities that are emerging right now,” the spokesperson added.

In other news, Germany’s Ifo Institute reported on Monday that confidence in the German economy has stabilized at a low level.

The ifo business climate index rose to 91.8 points in April, from 90.8 points in March. This was mainly due to less pessimism in business expectations, Ifo said.

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— CNBC’s Ryan Browne, Silvia Amaro, Sarah Min and Matt Clinch contributed to this market report.

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