MILAN/FRANKFURT: German shares closed at their lowest in nearly four months on Monday as Europe's most valuable tech firm, SAP, experienced its worst trading day in 24 years after cutting its 2020 outlook.
The German DAX fell 3.7% as SAP slumped almost 22% after abandoning medium-term profitability targets and cautioning that its business would take longer than expected to recover from the pandemic hit.
"SAP's pessimism does not bode well for hopes for the global economic recovery to continue," said Edward Moya, senior market analyst at OANDA, New York.
The wider European tech index slid 7.4%.
SAP's results came as a blip in the third-quarter earnings season, which has been largely better than feared.
The euro zone blue-chip index fell nearly 3%, while Europe's travel and leisure sector, worst hit by the movement curbs, was down 3.3%.
Nick Nelson, head of European equity strategy at UBS, said the Swiss bank's target for STOXX 600 into the year-end is 340 points, about 4.5% below the current level, in part due to the impact of the latest round of restrictions.
Milan's blue-chip index fell 1.8% even as ratings agency Standard and Poor's upgraded Italy's sovereign outlook to stable from negative.
Oil majors Total and Royal Dutch Shell fell over 2.8% as crude prices slumped more than 3% on demand worries.
Healthcare stocks remained supportive, with AstraZeneca gaining 1.7% after it resumed the US trial of its experimental Covid-19 vaccine.
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