- Volatility for the Turkish lira and bonds comes after President Recep Tayyip Erdogan abruptly replaced the central bank chief days after a sharp interest rate hike, which Erdogan opposes.
- Travel and leisure names took a beating Monday as fears resurface for a third wave of coronavirus infections in Europe.
LONDON — European stocks closed slightly higher on Monday, with investors watching Turkey closely following President Erdogan's surprise decision to replace the central bank's chief.
The pan-European Stoxx 600 finished up 0.2%, with autos climbing 1.7% while retail stocks dropped 1%.
European markets received a muted handover from Asia-Pacific, where shares traded mixed on Monday as investors watched moves in the Turkish lira and bonds, following a sudden upheaval at the country's central bank.
Volatility for the currency comes after President Recep Tayyip Erdogan abruptly replaced the central bank chief just days after a sharp interest rate hike, which Erdogan vehemently opposes.
Meanwhile stateside, the Nasdaq Composite led the S&P 500 higher on Monday amid falling U.S. Treasury yields as Wall Street looked to bounce back from a losing week.
Travel and leisure names took a beating Monday, as fears resurfaced for a third wave of coronavirus infections in Europe. British Airways parent IAG and Swiss travel retailer Dufry both dropped around 5% while Anglo-German travel operator Tui shed 4.4%.
At the bottom of the index, Spanish bank BBVA dropped 6.8% after re-affirming its commitment to Turkey on the back of the news of Erdogan's central bank move.
"Airlines and travel operators had seemingly refused to countenance the cataclysmic idea of another heavily disrupted summer and had been busily advertising to an increasingly inoculated U.K. population," said Russ Mould, investment director at stockbroking platform AJ Bell.
"However, the significantly slower pace of the vaccine rollout in the EU, a spike in infections in mainland Europe and the emergence of new variants has complicated the picture."
Mould suggested that this summer may be worse than the last for British tour operators if the government keeps travel restrictions in place to avoid undermining its successful vaccine rollout.
- CNBC's Jesse Pound, Yun Li and Eustance Huang contributed to this market report.
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