Data Dampens European Stocks, Helps Wall Street

Europe’s equity markets slipped Thursday on survey data indicating the region’s economy continued to be battered by coronavirus fallout, while positive jobs data helped Wall Street open higher.

Oil prices slid as a crucial OPEC gathering got underway about whether or not to extend the current level of output cuts, 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.

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 afternoon deals, London’s benchmark FTSE 100 index nudged lower less than 0.1 percent, having rallied the previous day after a sliding pound pushed up shares in multinationals.

In eurozone trades Thursday, Frankfurt’s DAX 30 index shed 0.5 percent and the Paris CAC 40 gave up 0.4 percent.

“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,” he added.

“Losses on stock markets are still relatively modest (because) everyone can see it will have been a tough month thanks to lockdown measures bearing down on economic performance.”

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. A level below 50 points indicates contraction.

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.

Investors have also had some relatively positive data in the US as new applications for jobless benefits fell to 712,000 last week, a better-than-expected decline of 75,000.

Wall Street’s main stock indices rose at the open, with the S&P 500 building on another record close.

There was also movement towards a new stimulus package.

Nancy Pelosi has welcomed a bipartisan stimulus proposal that investors hope can break a months-long deadlock with Republicans Nancy Pelosi has welcomed a bipartisan stimulus proposal that investors hope can break a months-long deadlock with Republicans Photo: AFP / Nicholas Kamm

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.

“The narrative about how the market is feeling optimistic about 2021 recovery prospects because of the arrival of Covid vaccines is growing a bit tired, yet market participants have been given a stimulant with the increased buzz on Capitol Hill about the need to get another stimulus package done soon,” said market analyst Patrick J. O’Hare at Briefing.com.

He added that the continued high number of new jobless claims along with more than 100,000 Covid-19 hospitalisations in the US were factors in the market viewing it likely that a deal will be done relatively soon.

London – FTSE 100: DOWN less than 0.1 percent at 6,462.97 points

Frankfurt – DAX 30: DOWN 0.5 percent at 13,253.05

Paris – CAC 40: DOWN 0.4 percent at 5,562.60

EURO STOXX 50: DOWN 0.1 percent at 3,517.22

New York – Dow: UP 0.2 percent at 29,951.01

Tokyo – Nikkei 225: FLAT at 26,809.37 (close)

Hong Kong – Hang Seng: UP 0.7 percent at 26,728.50 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,442.14 (close)

Euro/dollar: UP at $1.2161 from $1.2115 at 2200 GMT

Pound/dollar: UP at $1.3471 from $1.3365

Dollar/yen: DOWN at 103.85 yen from 104.42 yen

Euro/pound: DOWN at 90.25 pence from 90.65 pence

West Texas Intermediate: DOWN 0.4 percent at $45.12 per barrel

Brent North Sea crude: DOWN 0.2 percent at $48.18

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