European stocks collapse after SAP profit warning and new COVID-19 restrictions

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European stocks traded lower on Monday over a combination of concerns, including a profit warning from enterprise software giant SAP, new activity restrictions in response to COVID-19, and difficulties in negotiations American stimulus.

Down 1.4% last week, the Stoxx Europe 600 SXXP,
-0,51%
fell 1.2%.

After the SAP warning, the German DAX DAX,
-2,01%
skid 2.7%. The French CAC 40 PX1,
-0,39%
down 1.2% and the UK FTSE 100 UKX,
+ 0,04%
lost 0.6%.Futures sur le Dow Jones Industrial Average YM00,
-0,86%
skid 285 points. The S&P 500 SPX,
+ 0,34%
fell 0.5% last week.

New activity restrictions have been introduced in Europe to fight a second wave of coronavirus. Italy from Monday will close bars and restaurants at 6 p.m., and shut down cinemas and gymnasiums completely, while Spain will introduce a curfew at 11 p.m. World Health Organization director-general Tedros Adhanom Ghebreyesus said countries in the northern hemisphere were facing a “dangerous time”.

House of Commons Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows on Sunday accused each other of moving the posts in stimulus talks, in separate talks they gave at CNN.

European investors are also positioning themselves ahead of talks between the European Union and the UK on a post-Brexit trade deal, this week’s European Central Bank meeting and next week’s US election.

Also note, the USDTRY dollar,
+ 0,82%
crossed 8 Turkish lira, another indicator of the economic struggles Turkey is facing.

SAP SAP,
-18,17%

SAP,
+ 1,38%
fell 20% – its worst performance in a day since losing 23% on October 23, 1996 – as the German enterprise software giant downgraded its outlook for 2020, saying the impact of COVID- 19 had been to postpone investment for and two years. SAP said its 2023 operating margin will be up to 5 percentage points lower than it previously targeted.

TeamViewer TMV,
-1,84%,
remote software manufacturer and IT consultant Capgemini CAP,
-2,88%
also fell after the SAP warning.

Coca-Cola European Partners CCEP,
+ 0,30%

CCEP,
-1,14%
rose 1% after offering 10.8 billion Australian dollars, or 5.2 billion euros, to Coca-Cola Amatil CCL,
+ 16,27%,
one of the largest bottlers and distributors of ready-to-drink non-alcoholic and alcoholic beverages and coffee in the Asia-Pacific region. The Coca-Cola Co. KO,
-0,31%
has provisionally agreed to sell its 31% stake. Coca-Cola European Bottlers separately said third quarter adjusted revenue fell 3%.

Bayer BAYN,
+ 1,07%
slipped 1% after saying it would pay up to $ 4 billion for Asklepios BioPharmaceutical, a US-based biopharmaceutical company specializing in gene therapies.

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