Mon, 18 Jan 2021

European stocks slip on poor data

04 Dec 2020, 00:12 GMT+10

Europe's equity markets slipped Thursday on survey data indicating the region's economy continued to be battered by coronavirus fallout, despite recent vaccine-driven optimism, dealers said.

Investors weighed Covid-19 vaccine hopes against rising infections and uncertainty surrounding a post-Brexit trade deal, OPEC oil output and a US stimulus package.

In late morning deals, London's benchmark FTSE 100 index edged down 0.1%, having rallied the previous day after a sliding pound pushed up shares in multinationals.

Confirmation that Britain will next week start rolling out the Pfizer-BioNTech vaccine against Covid-19 has meanwhile led to traders booking profits following big share-price gains in recent weeks on expectations of mass inoculations before 2021.

In eurozone trades Thursday, Frankfurt's DAX 30 index dipped 0.6% and the Paris CAC 40 shed 0.5%.

Oil prices slid before a crucial OPEC production gathering that starts at 15:00, while the British pound clawed back some of the previous day's losses amid troubled post-Brexit deal talks between the UK and the European Union.

Virus impact

"A more cautious mood has descended on stock markets in Europe... after final PMI readings provided a less than stellar outlook for the region," noted analyst Chris Beauchamp at trading firm IG.

"The rash of figures confirmed the pessimistic near-term view of the eurozone economy and for the UK as well.

"Losses on stock markets are still relatively modest (because) everyone can see it will have been tough month thanks to (virus) lockdown measures bearing down on economic performance," Beauchamp added.

Data provider IHS Markit said its closely-watched composite eurozone purchasing managers' index (PMI) index fell to 45.3 points in November from 50 points in October, according to final estimates.

Britain's services PMI dropped to 47.6 from 51.4. Any reading above 50 points indicates that activity is expanding - but a level below 50 points indicates contraction.

Asia upbeat

In contrast to Europe, Asian stock markets mostly rose Thursday as investors tracked renewed US stimulus talks in Washington, while the mood remains upbeat owing to vaccine developments.

Traders are now focusing on regulators in the US and Europe, and the global vaccine rollout that will allow life to get back to normal and the world economy back on track.

Wall Street enjoyed another broadly positive day, with the S&P 500 chalking up another record close, while the Dow also advanced, though the Nasdaq inched down from Tuesday's all-time high.

Speaker Nancy Pelosi threw her support behind a $908-billion compromise virus relief package proposed by a bipartisan group of lawmakers on Tuesday. The proposal is however half what Democrats had previously been pushing for.

OPEC and other major producers will meet later in the day to try to hash out an agreement to extend output cuts over the coming months.

While the talks have stumbled this week, many still expect they will eventually push back the end of the current production cuts from January 1, 2021 to April 1.

Source: News24

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