European stock markets mixed as COVID fears rise

·Reporter
·3 min read
FTSE 100 London markets
In London, the FTSE 100 rose 0.5% after opening, building on gains from the previous session, while the French CAC climbed 0.2%. Photo: Vuk Valcic/SOPA/LightRocket via Getty Images

European stock markets were mixed on Wednesday amid rising COVID-19 cases and increased restrictions in the bloc.

In London, the FTSE 100 (^FTSE) rose 0.3% by afternoon trade, dipping slightly from its stronger open, while the French CAC (^FCHI) was trading flat.

The Frankfurt DAX (^GDAXI) was down 0.5% on the day, adding to previous losses, as the index continued to fall after four consecutive days amid a fourth wave of COVID-19 infections in Germany.

It followed French health minister Olivier Véran saying in parliament on Tuesday that “we are sadly well and truly in a fifth wave of the epidemic” as France announced 30,454 new cases.

Austria has also recently moved into a nationwide lockdown, while the Netherlands announced that social distancing would be reintroduced on a mandatory basis, with people required to stay 1.5m apart. Poland saw the biggest daily increase in hospitalisations since April.

The euro also tumbled to its lowest level since July last year thanks to a dent in German business confidence, slumping to a seven-month low in November.

Watch: Austria becomes first country in Western Europe to re-enter a full COVID lockdown

Across the pond, the S&P 500 (^GSPC) dipped 0.2%, and the tech-heavy Nasdaq (^IXIC) fell 0.3%. The Dow Jones (^DJI) edged 0.3% lower around the time of the European close.

Markets were rattled by some disappointing results, with retailers Gap (GPS) and Nordstrom (JWN) dropping as much as 25% and 29%, respectively, after warning of supply chain troubles and rising costs.

It also came as the US economy grew at an annualised rate of 2.1% in the third quarter of the year, slightly higher than the 2% pace estimated a month ago, with consumer spending up 1.7%.

This comes after 6.7% growth in the previous quarter, due to a slowdown in consumer spending, the US Commerce Department’s Bureau of Economic Analysis revealed.

"A resurgence of COVID-19 cases resulted in new restrictions and delays in the reopening of establishments in some parts of the country," BEA said. "In the third quarter, government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased."

Read more: Black Friday and Christmas to decide fate of one in five UK small businesses

Meanwhile, initial jobless claims fell by 71,000 to 199,000 in the week to 20 November, the US Labour Department said separately on Wednesday. This was better than the 260,000 expected by economists and the lowest level since November, 1969 when it was 197,000. 

The previous week’s level was also revised up slightly, by 2,000 to 270,000.

Unemployment claims hit a peak of 6.1 million last year but have since declined as the economy reopens and Americans return back to work.

Asian markets were mixed on Wednesday following a run of recent weakness, with the Nikkei (^N225) slumping 1.6% in Japan while the Hang Seng (^HSI) rose 0.1% in Hong Kong, and the Shanghai Composite (000001.SS) was also 0.1% higher.

Watch: What are SPACs?

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