European stocks head lower ahead of business activity data

(Reuters) – European stocks fell on Friday, hit by tighter travel restrictions in the euro zone and weak UK retail sales numbers, while investors awaited the latest batch of business activity data to gauge the pace of recovery from the coronavirus crisis.

The pan-European STOXX 600 index fell 0.4% by 0805 GMT, but was set for slim weekly gains.

Germany’s Lufthansa and Air France fell about 2%, while holiday group TUI tumbled 10% after the European Union proposed to label hotspots of COVID-19 infections as “dark red” zones, and travellers from those areas will have to take a test before departure and undergo quarantine.

UK’s FTSE 100 fell 0.3% after retail sales bounced back weakly in December, marking their worst year on record, while public debt climbed to its highest since 1962.

Investors are awaiting IHS Markit’s early readings of the euro zone and UK Purchasing Managers’ Index (PMI) for January, which is likely to show business activity contracted from December due to renewed lockdowns.

Among gainers, German engineering group Siemens AG rose 4.1% as it reported stronger-than-expected preliminary results for its first quarter, driven by a strong performance of its digital division.

(Reporting by Amal S in Bengaluru; Editing by Arun Koyyur)