Retail frenzy, concerns about vaccine adoption persist

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LONDON – European markets closed on Friday as market tremors continued over a retail frenzy that rocked Wall Street.

The pan-European Stoxx 600 ended the session 1.9%, with retail stocks falling 2.6% to cause losses as all sectors slid into negative territory.

Sentiment has been rocked by a surge in speculative trading by retail investors, and several e-brokers took steps to curb deliberate purchases of sharply abbreviated names on Thursday after a week of large and seemingly synthetic moves on unfavorable names like GameStop on Reddit group WallStreetBets.

U.S. stocks fell sharply on Friday after Johnson & Johnson’s coronavirus vaccine trial results disappointed some investors and worried about retailers. Johnson & Johnson said Friday its one-shot vaccine was 72% effective in the US but less effective in other regions.

Also on Friday, the European Medicines Agency approved the vaccine developed by British pharmaceutical giant AstraZeneca for use in the EU emergency, about a month after it was first given the green light in the UK, which recently left the block.

However, the European Commission has also carried out temporary controls on exports of block-made coronavirus vaccines after spitting on AstraZeneca and other supply issues.

In the company news on Thursday, Daimler exceeded earnings expectations for the full year 2020 due to a strong fourth quarter. Earnings before interest and taxes (EBIT) were 6.6 billion euros (7.99 billion US dollars) compared to the 5.25 billion euros expected by analysts. The German car manufacturer was also optimistic in its forecast for 2021.

The new CEO of Commerzbank, Manfred Knof, plans to cut another 10,000 jobs and close hundreds of branches, the second largest German lender announced on Thursday.

In terms of data, the French economy contracted less than expected in the fourth quarter of 2020 due to a second national lockdown on the coronavirus, official statistics showed on Friday. The fourth quarter GDP (gross domestic product) was -1.4% compared to the average consensus of -4% in a Reuters poll.

Ericsson shares rose 7.6% to the top of the Stoxx 600 after the Swedish telecommunications company significantly beat earnings expectations for the fourth quarter.

At the bottom of the European blue chip index, the German car battery maker Varta and the biotech company Evotec fell 18.8% and 12.3% respectively. Both stocks had been added to earlier sessions following the liquidation of large short positions by the retailer-attacked Wall Street hedge funds.

– CNBC.com contributed to this report.