The brand new coronavirus pressure weighs on the temper
LONDON – European stocks opened higher Tuesday, trying to bounce back from a brutal sell-off in the previous session as investor sentiment was shaken by a new strain of coronavirus in the UK
The pan-European Stoxx 600 was trading 0.7% early this morning, while the German DAX index rose nearly 0.9%. The UK’s FTSE 100 bucked the trend, falling 0.2%. In terms of sectors, banks were the top winners, up 1.2%.
Profits are likely to be limited by ongoing concerns about a rapidly spreading Covid mutation, first identified in the UK. The new variant forced the British government to shut down London and other parts of south-east England and to trace the confusion of households over the Christmas break.
The variant, which scientists say is up to 70% more transmissible than previous strains in the UK, has also been identified in Italy, the Netherlands, Belgium, Denmark and Australia. It has resulted in several countries around the world closing their borders with the UK, disrupting travel and raising concerns about possible food shortages as the deadline for the Brexit transition approaches.
Meanwhile, the UK and EU remain bogged down on post-Brexit trade relations as the December 31 deadline draws nearer and disputes over issues such as fisheries plague talks. British Prime Minister Boris Johnson said Monday the country could still collapse without a deal.
“The position is unchanged, there are problems,” British Prime Minister Boris Johnson told reporters on Monday. “It is important for everyone to understand that Britain needs to be able to fully control its own laws and that we need to be able to control our own fisheries.”
“The case remains that the WTO terms are more than satisfactory for the UK and we can certainly face any difficulties that come our way.”
Sterling extended Monday’s losses on Tuesday and fell another 0.5% to around $ 1.34.
In Asia, stocks fell on jitter over the new strain of coronavirus. The broadest MSCI index for stocks in Asia Pacific outside Japan fell 0.43%.
On Wall Street, stock futures were mixed after a volatile session in which the Dow Jones Industrial Average cut a 400-point deficit.
The muted move came when Congress passed a coronavirus aid and government spending package on Monday evening. The bill now goes to President Donald Trump’s desk.
As for the data, UK third quarter GDP and German consumer sentiment numbers are due at 7am in London.