Investors are growing more concerned about high stock prices and the potential for inflation in general

London (AFP) - European stock markets were in idle mode Monday as falling infection rates and upbeat vaccine news failed to allay nagging concerns over high share valuations and inflation.

Even though the United States has reported almost 500,000 Covid deaths, optimism is rising as governments pursue immunisation programmes that should allow economies to recover.

British Prime Minister Boris Johnson laid out a four-step plan to ease coronavirus restrictions Monday, and expressed hope that life could get back to normal by the end of June.

In Germany, a survey showed that business confidence has improved this month, with the robust industrial sector of Europe’s top economy withstanding the impact of coronavirus restrictions.

The Ifo institute’s monthly confidence barometer, based on a survey of 9,000 companies, climbed to 92.4 points from 90.3 points in January, when tougher measures to fight the pandemic were introduced.

But European stock markets “have kicked off the week on a somewhat unstable footing, with the fears over rising inflation and (US) Treasury yields once again dampening sentiment on a day that had promised to be dominated by reopening hopes”, noted Joshua Mahony, senior market analyst at the IG trading group.

The pound held gains above $1.40 – reaching its highest levels since April 2018 – as the British vaccine drive moved forward.

Bitcoin fell to below $54,000, having hit another record high of $58,350 and passing $1 trillion in market capitalisation.

The stock market rally that has characterised the past few months looks to have run out of steam as traders worry that prices might have risen too far.

Concern is also growing that an expected recovery and US stimulus package will fuel a surge in inflation, and that the Federal Reserve would then crank up record-low interest rates.

On the political front, investors are keeping tabs on China-US relations after President Joe Biden urged European allies to stand up to political and economic challenges from Beijing.

- Key figures around 1645 GMT -

EURO STOXX 50: DOWN 0.2 percent at 3,704.96 points

New York - Dow: UP less than 0.1 percent at 31,511.95

London - FTSE 100: DOWN 0.2 percent at 6,612.24 (close)

Frankfurt - DAX 30: DOWN 0.3 percent at 13,950.04 (close)

Paris - CAC 40: DOWN 0.1 percent at 5,767.44 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 30,156.03 (close)

Hong Kong - Hang Seng: DOWN 1.1 percent at 30,319.83 (close)

Shanghai - Composite: DOWN 1.5 percent at 3,642.44 (close)

Pound/dollar: UP at $1.4074 from $1.4004 at 2130 GMT on Friday

Euro/dollar: UP at $1.2151 from $1.2114

Euro/pound: DOWN at 86.35 pence from 86.48 pence

Dollar/yen: DOWN at 105.04 yen from 105.46 yen

Brent North Sea crude: UP 2.5 percent at $64.50 per barrel

West Texas Intermediate: UP 3.0 percent at $60.99 per barrel