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UPDATE 2-Europe lockdown fears trigger worst stocks sell-off in 3 months

Mon, 21st Sep 2020 09:44

* Travel stocks slump as UK ponders national lockdown again

* HSBC drags banks lower after dirty money scandal

* France's Iliad makes $4.2 bln bid for Poland's Play
(Adds quotes, releads)

By Sruthi Shankar

Sept 21 (Reuters) - European stocks were headed for their
worst fall in three months on Monday as fears that a second wave
of COVID-19 infections would lead to new social distancing
measures hit travel and leisure shares and banks amid a new
dirty money scandal.

There could be up to 50,000 new cases per day in Britain by
the middle of October if the epidemic continues at its current
pace, the country's chief scientist adviser warned amid
speculation over new "stay-at-home" orders from the government.

"I think they’re (investors) clearly nervous on chances of a
second lockdown", said Jane Shoemake, an investment director at
Janus Henderson.

London's FTSE 100 was the worst-hit blue chip index in
Europe, falling bout 3.5% with UK-focused midcaps in the FTSE
250 dropping over 4%.

The pan-European STOXX 600 was down 2.9%, a fall not
matched since the beginning of June.

Europe's travel and leisure index fell 5.7%, its
worst drop since April with airlines such as BA owner IAG
retreating 13.5% or Lufthansa 8%.

European banks fell over 6% just a few points from a
record low following reports that banks such as HSBC and
Standard Chartered were among those moving large sums of
allegedly illicit funds over the past two decades.

HSBC's shares in Hong Kong and Standard Chartered's in
London fell on Monday to their lowest since at least 1998 after
media reports that they and other banks, including Barclays and
Deutsche Bank, moved large sums of allegedly illicit funds over
nearly two decades despite red flags about the origins of the
money.

Barclays and Deutsche Bank, which were
also mentioned in the reports, fell 5.6% and 5.8%, respectively.

Meanwhile, a report from China's state-run Global Times
suggested that HSBC could be a possible candidate for inclusion
in the country's "unreliable entity list" that targets foreign
firms which violate Chinese laws or commit "illegal acts". (https://bit.ly/33Ocrpp)

Among other individual stocks, Britain's Rolls-Royce
Holdings slumped 9.6% after the aero-engine maker said it
was looking to raise up to 2.5 billion pounds ($3.2 billion) in
an effort to strengthen its balance sheet.

German telecom 1&1 Drillisch dropped 28% after
warning that an increase in the cost of its network access deal
with Telefonica Deutschland would hit profits this
year. Its parent United Internet fell 26.1%.

Adding to recent string of M&A activity, Play Communications
soared 37.2% after French telecoms group Iliad
said it plans to acquire the Polish mobile phone operator in a
3.5 billion euros ($4.15 billion) deal. Iliad slipped 2.3%.
(Reporting by Sruthi Shankar in Bengaluru and Julien Ponthus in
London; Editing by Shounak Dasgupta and Ed Osmond)

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