European Stocks Stagnate; More Stimulus News Awaited

European Stocks Stagnate; More Stimulus News Awaited

© Reuters.  © Reuters.

By Peter Nurse – European stock markets traded in narrow ranges Thursday, pausing for breath while waiting for more news about Covid-19 vaccine approvals as well as Brexit trade negotiations.

At 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.2% lower, the CAC 40 in France fell 0.3%, while the U.K.'s FTSE index outperformed, climbing 0.1%.

Global stock markets have seen strong gains on the idea that vaccines to combat the Covid-19 virus are coming shortly, returning the world’s economies back to some form of normalcy.

On Wednesday, the U.K. became the first country to grant emergency approval to the Pfizer-BioNTech vaccine. The U.S. and Europe are expected to follow in short order, while drugmakers Moderna (NASDAQ:MRNA) and AstraZeneca (NASDAQ:AZN) are also seen shortly offering up their products for approval.

China’s Caixin services Purchasing Managers' Index for November came in at 57.8, ahead of expectations, but the data in Europe has been more mixed. The Eurozone composite PMI for November was revised up slightly from the flash reading, but at 45.3 still represented a sharp slowdown from October's 50.0 and a clear contraction in overall terms.

A potential fly in the ointment could be the negotiations surrounding the future trading relationship between the U.K. and the European Union after the end of the post-Brexit transition period on Dec. 31.

In corporate news, Nestle stock was unchanged after the food and drink giant said it would spend some 3 billion euros ($3.6 billion) over the next five years to reduce its net carbon emissions to zero, while Orange (PA:ORAN) stock fell 1.5% after the French telecommunications company announced plans to take over its Belgian subsidiary Orange Belgium, valuing the unit at 1.3 billion euros ($1.57 billion).

SAS (ST:SAS) stock fell 4.5% after the Swedish airline posted a fiscal fourth-quarter net loss, and said it couldn’t give guidance given the uncertain nature of future travel given the pandemic.

Oil prices edged higher Thursday, with the focus remaining on whether leading producers will extend record production cuts set in place to balance out the severe hit to demand in the wake of the Covid-19 pandemic.

The Organization of the Petroleum Exporting Countries and Russia, a group known as OPEC+, had been widely expected to roll over cuts of 7.7 million barrels per day, at least until March 2021. However, there has been disagreement within the group of the need to do so, particularly given the recent bounce in oil prices as vaccines have been approved.

U.S. crude futures traded 0.3% higher at $45.42 a barrel, while the international benchmark Brent contract was up 0.5% at $48.48.

Elsewhere, gold futures rose 0.7% to $1,842.10/oz, while EUR/USD traded 0.1% higher at 1.2117.

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