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28 Jan 2021 | 11:51

Europe midday: Shares pare back morning losses, but still lower

(Sharecast News) - European shares pared back losses at lunchtime on Thursday after a sharp sell-off on Wall Street as investors continued to fret about more contagious variants of the coronavirus.



The pan-European Stoxx 600 was down 0.76% at 1158 GMT, with major regional bourses tracking the decline.

In the US overnight, strong earnings from Apple and Facebook and the US Federal Reserve's pledge to stick to loose monetary policy were cast aside by investors as they focused on tighter Covid curbs in Europe and a row over vaccine allocations.

The Dow Jones closed 2% lower on Wednesday, its biggest one-day fall since October.

With new strains of the virus emerging in Britain, Brazil and South Africa, Germany was preparing entry restrictions for travellers from those countries.

German health minister Jens Spahn said he expected the current shortage of coronavirus vaccines to continue well into April.

Meanwhile the spat between the UK and European Union over the Oxford/AstraZeneca vaccine intensified.

Brussels has complained over the UK government's decision to hoard locally-produced doses. The 27 member bloc has been angered after it reportedly allowed the pharma firm to use European sites to produce the vaccine when UK its UK facility ran into difficulties.

The EU argues that Britain should share its output as a quid pro quo for that act of solidarity. Meanwhile, Spanish officials said delays to vaccine shipments were threatening supplies in Catalonia and had forced authorities in Madrid to halt inoculations.

Reports suggested the UK would only supply other countries after it had made 100 million doses for local distribution.

In equity news, shares in British life insurer Prudential fell 8.9% as the company said it would separate its US business Jackson through a demerger to better focus on Asian and African markets, while adding it was considering raising $2.5bn -$3bn in new equity.

EasyJet shares fell as the budget airline said it expected to fly no more than 10% of 2019 capacity in the second quarter as tighter coronavirus restrictions triggered an 88% slump in revenue for the three months.

Drinks maker Diageo bucked the trend with a 3.2% rise after the company reported a surprise jump in underlying first-half net sales growth, helped by strong US demand.

Tate & Lyle was also on the rise after it hailed a "strong" third-quarter performance, with volume growth in each business and group revenue up 8% compared to the same period a year ago.



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