EconomyEditor's PickNewsEuropean Stocks Edge Lower; Coronavirus Concerns Weigh

2 years ago5210 min
imageStock Markets38 minutes ago (Oct 06, 2020 03:41AM ET)

(C) Reuters

By Peter Nurse – European stock markets have edged lower Tuesday as coronavirus concerns tempered any enthusiasm generated by signs of recovery in the dominant German manufacturing sector and reduced U.S. political uncertainty.

At 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.1% lower, the CAC 40 in France fell 0.1% and the U.K.’s FTSE index dropped 0.5%.

German factory orders rose for a fourth month, climbing 4.5% in August, in the latest sign that Europe’s largest economy, with its concentration on heavy industry, is faring better than its services-focused peers in recovering from the pandemic.

Yet coronavirus cases continue to mount, with over 35 million affected globally, more than a million dead and many countries imposing new economic restrictions as daily case growth accelerates.

Citigroup (NYSE:C) has downgraded its investment stance on Continental European stocks to underweight, saying it’s worried about “a second Covid-19 wave, more EPS downgrades, extended valuations and a chaotic U.S. election.” Adding, “the region’s cyclical tilt will leave it vulnerable if economic recovery stalls. A strong euro will also weigh on corporate performance.” The bank kept its view on U.K. stocks at neutral and U.S. equities at overweight.

The world’s top central bankers have offered up unparalleled levels of monetary largesse during the global pandemic, but markets will be looking for hints of more when top officials from the Federal Reserve, European Central Bank and Bank of Japan speak Tuesday at a virtual meeting of the National Association for Business Economics.

Late Monday, President Donald Trump returned to the White House on Monday after a three-night hospital stay following treatment for Covid-19, likely removing an area of uncertainty ahead of next month’s U.S. presidential election, while confidence is also growing that U.S. lawmakers can agree to a new stimulus package.

In corporate news, Suez (PA:SEVI) stock rose 5% after rival Veolia (PA:VIE), up 1.4%, bought 29.9% of the French waste and water firm and launched a tender offer on the rest of the capital. Suez has pledged to fight the takeover attempt.

Puma (DE:PUMG) dropped 2.8% after French luxury group Kering (PA:PRTP)completed the sale of a 5.9% stake in the German sports gear maker for approximately 656 million euros ($772 million).

Premier Oil (LON:PMO)stock jumped 12% after announcing plans to merge with Chrysaor, bringing together two of the largest U.K. North Sea oil and gas producers.

Oil prices pushed higher Tuesday as hopes grow over a new U.S. economic stimulus package. Data from the American Petroleum Institute on Tuesday and the U.S. government on Wednesday will be studied to see whether demand is picking up.

U.S. crude futures traded 0.1% higher at $39.23 a barrel, while the international benchmark Brent contract rose 0.1% to $41.33.

Elsewhere, gold futures fell 0.3% to $1,914.85/oz, while EUR/USD traded flat at 1.1780.

European Stocks Edge Lower; Coronavirus Concerns Weigh

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