Coronavirus restrictions, SAP slump knock European stocks

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 19, 2020. REUTERS/Staff

(Reuters) – European stocks sank on Monday, as Italy and Spain imposed fresh restrictions to control a resurgence in coronavirus cases, while shares in German heavyweight SAP slumped 20% after it cut its 2020 outlook.

The pan-European STOXX 600 index .STOXX tumbled 1.2% by 0809 GMT, with risk appetite globally sapped by worries over U.S. stimulus progress and presidential election.

The German DAX .GDAXI dropped 2.7% to hit a three-month low after software company SAP SAPG.DE abandoned medium-term profitability targets and cautioned that its business would take longer than expected to recover from the pandemic.

The wider tech index .SX8P slumped 5.8%.

Europe became the second region after Latin America to surpass 250,000 deaths on Saturday, according to a Reuters tally, as many Southern European countries reported their highest number of COVID-19 cases in a single day.

Italy on Sunday ordered bars and restaurants to close by 6 p.m. and shut public gyms, cinemas, while Spanish Prime Minister Pedro Sanchez announced a new state of emergency.

Milan’s blue-chip index .FTMIB dropped 1.5%, even as ratings agency Standard and Poor’s upgraded Italy’s sovereign outlook to stable from negative.

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