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Energy, miners lead European losses
Defensive stocks remain supported
Virgin Money surges on results
Nov 21 (Reuters) - Europe's STOXX 600 index was little
changed on Monday as gains in defensive food and beverage and
healthcare companies were offset by declines in heavyweight
commodity stocks on worries about the impact of surging COVID-19
cases in China.
Before closing down 0.06%, the benchmark index
swung up and down during the entire session after marking its
fifth straight weekly advance on Friday.
Globally sentiment took a hit as investors fretted about the
economic fallout from fresh COVID-19 restrictions in China, with
Beijing's most populous district urging residents to stay at
home as cases rose.
"The worsening situation is coming at a time of fears of flu
outbreaks, which is putting fresh pressure on commodity stocks,
with mining companies feeling more pain in trading today," said
Susannah Streeter, senior investment and markets analyst,
Mining, travel & leisure, and industrial
goods and services sectors fell between 0.2% and 1.5%.
Oil and gas companies dropped 2.7% as Brent crude
prices slid more than $5 a barrel after the Wall Street Journal
reported that Saudi Arabia and other OPEC oil producers are
discussing an output increase.
Defensive sectors such as healthcare, food and
beverages and media, which are typically
preferred during times of economic uncertainty, rose between 1%
and 1.2%, helping to limit broader market losses.
The benchmark STOXX 600 has recovered 13% since hitting this
year's closing low in September on better-than-expected earnings
reports and hopes that the U.S. Federal Reserve will shift to
smaller rate hikes.
While comments from European Central Bank officials were
mixed last week, ECB chief economist Philip Lane told Market
News on Monday that the central bank will raise rates again in
December but the case for another 75 basis point move has
"Although the pace and size of hikes are expected to slow,
the prospect that higher rates will linger for longer than hoped
is adding to recession worries," added Streeter.
earlier showed German producer prices fell unexpectedly on
the month in October, primarily due to a dip in prices for
electricity and distributed natural gas.
Julius Baer rose 1.6% as the Swiss bank said it was
on track to reach its 2022 profitability targets even though
"challenging market" conditions have shrunk its assets.
Virgin Money surged 14.9% after the British
lender reported a jump in full-year profit and investor payouts.
Vallourec tumbled 13.2% after the French steel
pipemaker posted downbeat quarterly core profit.
Italy's FTSE MIB index slid 1.3% ahead of the
approval of Italian Prime Minister Giorgia Meloni's first budget
by her cabinet.
(Reporting by Sruthi Shankar and Devik Jain in Bengaluru;
Editing by Bernadette Baum)