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European stock markets weighed down by third wave COVID fears

LaToya Harding
·Contributor
·3-min read
German chancellor Angela Merkel was forced into a sharp U-turn over her decision to announce a five-day lockdown over the Easter period. Photo: Stefanie Loos/AFP via Getty
German chancellor Angela Merkel was forced into a sharp U-turn over her decision to announce a five-day lockdown over the Easter period. Photo: Stefanie Loos/AFP via Getty

European stock markets tumbled into the red on Thursday as growing fears of a third wave in Europe dragged on sentiment, and the European vaccines summit met via video conference.

In London, the FTSE 100 (^FTSE) closed 0.57% lower thanks to pressure from a rising pound (GBPUSD=X), while the French CAC (^FCHI) and the German DAX (^GDAXI) finished flat, down 0.08 and 0.06, respectively.

It came as the European Union (EU) is deciding on whether to ban vaccine exports during a two-day summit today.

According to a draft final statement seen by Reuters, the 27 EU members will also discuss how to speed up vaccinations across the bloc, as well as industrial policy and relations with Turkey and Russia.

Michael Hewson, chief market analyst at CMC Markets UK, said: “Tensions between the EU and UK still remain fairly elevated, despite efforts to cool the narrative, while the recent comments from Thierry Breton, the EU’s internal market commissioner, accusing the UK of vaccine nationalism still suggest the potential for a misstep, as feelings continue to run high, particularly on the EU side, where the sense of grievance remains especially elevated."

He adds: “Sentiment in Europe continues to remain fragile after German chancellor Angela Merkel was forced into a sharp U-turn over her decision to announce a full five-day lockdown over the Easter period, as the German government's response to their rising crisis shows further signs of coming apart at the seams.”

WATCH: EU ban on vaccine exports will harm bloc's reputation, minister warns

Across the pond, the S&P 500 (^GSPC) rose 0.07% at the time of the European close, after starting the day lower, while the tech-heavy Nasdaq (^IXIC) fell 0.03%. The Dow Jones (^DJI) edged 0.09% higher.

It came as US GDP grew at an annualised rate of 4.3% in the fourth quarter, according to the final estimate from the Bureau of Economic Analysis. This was up from the previously reported 4.1%.

Jobless claims also fell to 736,000 in the week to 20 March, from 749,000 in the previous week, which was revised slightly higher, the US Labour Department showed.

Asian equities bounced between gains and losses on Thursday as a selloff in Chinese technology shares due to concerns they will be delisted from US bourses and worries about a semiconductor shortage rattled some investors.

MSCI's broadest index of Asia-Pacific shares outside Japan fell overnight. The index is close to wiping out all the gains it has posted so far this year.

Hong Kong shares fell sharply at the open but then later erased most of its losses, the Hang Seng (^HSI) closed just 0.06% lower. Alibaba Group (9988.HK), Xiaomi Corp (1810.HK), and Tencent Holdings (0700.HK) all traded lower. Shares in China rose 0.28pc.

The Shanghai Composite (000001.SS) dipped 0.1% and the Nikkei (^N225) climbed 1.14% while other key markets lagged.

The US securities regulator is introducing measures that would kick foreign companies off American stock exchanges if they fail to comply with US auditing standards, and require them to disclose any government affiliations. The measures are widely expected to hit Chinese companies.

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