European Stocks Log Worst Losses in Two Months

European stocks dropped on Thursday, with all market sectors closing in red, amid worried about the new coronavirus (COVID-19) variants.

The pandemic-related concerns are driving more investors into safe havens, such as the bonds, which is reflecting negatively on the stock market due to questions about maintaining the pace of the economic recovery.

The recently released mixed economy data seem to have played a role in the shift towards bonds, driving yields to record low levels.

In addition, recent remarks by the European Central Bank (ECB) pointed to a shift in the inflation target to 2%.

The new 2% symmetric inflation target means that level is not a ceiling, according to ECB President Christine Lagarde. The ECB has abandoned its “below, but close to 2%” target in its strategic review published earlier today.

The STOXX Europe 600 index closed lower by 1.72% at 451.61 points, its lowest settlement since June 3.

This marked the worst performance for the pan-European index since May 11.

French CAC40 dropped by 2.01%, while the German DAX fell by 1.73%, and the UK’s FTSE100 declined by 1.68%.