European stocks down as fears at virus surge outweigh good news on vaccines

Iseq index in Dublin drops almost 0.3% on extremely thin trading volumes

The pan-European Stoxx 600 edged 0.3%  lower but is still close to a 10-month high. Photograph: Getty Images

The pan-European Stoxx 600 edged 0.3% lower but is still close to a 10-month high. Photograph: Getty Images

 

European stocks fell in thin trading on Wednesday as investors weighed rising coronavirus cases in the region against further progress in vaccinations.

US stocks climbed, with small-cap shares outperforming in one of the final trading sessions of 2020.

DUBLIN

The Iseq index dropped almost 0.3 per cent on extremely thin trading volumes, although it remains on course for a near 5 per cent gain overall in 2020.

The two main banks both slipped, dragging the index into the red. AIB finished the session down almost 2.2 per cent to close at €1.66 per share, while Bank of Ireland was down 2.4 per cent to €3.31.

Despite the return of confidence into the European leisure sector as vaccines are rolled out, Datalex, the Dermot Desmond-backed provider of retail software to airlines, fell 9.2 per cent. It closed at 49 cent per share after slipping heavily in afternoon trading.

Irish Ferries owner Irish Continental Group rose by 2.7 per cent to close at €4.50, as UK MPs passed the Brexit trade deal that looks set to ensure stability in east-west trade between Ireland and Britain.

LONDON

British stocks ended lower, reversing early gains as fears over a fast-spreading new strain of the coronavirus led to most of the country being placed under tighter restrictions, even as Britain approved AstraZeneca’s Covid-19 vaccine.

The blue-chip FTSE 100 lost 0.7 per cent after hitting a fresh 10-month high in the previous session. Miners and consumer stocks, mainly Rio Tinto, Anglo American and Diageo, were the biggest drag on the index.

Britain on Wednesday became the first country in the world to approve the coronavirus vaccine developed by Oxford University and AstraZeneca, hoping that rapid action will help it stem a record surge of infections. Shares of AstraZeneca closed 0.8 per cent lower.

The mid-cap FTSE 250 index, considered a barometer of Brexit sentiment, shed 0.9 per cent, although British lawmakers approved prime minister Boris Johnson’s post-Brexit trade deal with the EU.

Energean rose 3.8 per cent after saying it would acquire the remaining 30 per cent stake in its Israeli offshore fields.

EUROPE

The pan-European Stoxx 600 edged 0.3 per cent lower but is still close to a 10-month high. The index is set to shed more than 3 per cent this year owing to disruptions caused by a second wave of coronavirus infections towards the end of the year.

Pandora led gainers on the Stoxx 600 after the Danish jewellery maker raised its guidance.

German shares ended a shortened session about 0.3 per cent lower in their last trading day this year. However, they added more than 3 per cent in 2020 thanks to flows into heavyweight technology stocks.

Spanish lender Unicaja rose 2.1 per cent, while Liberbank was down 4.1 per cent after they announced an all-in share deal that would create the country’s fifth biggest bank. The deal marks an acceleration of the sector’s consolidation after the approval of a merger between state-owned Bankia and Caixabank earlier this month.

NEW YORK

The dollar continued its slide, weakening to the lowest in 2½ years.

Ten of the 11 major S&P 500 sub-sectors rose in early trading, with energy, materials and industrial , which are expected to benefit the most from an economic rebound, gaining the most.

Automakers were among the best performers as the S&P 500 index edged higher, while the Russell 2000 gauge of smaller companies rallied about 1 per cent after its worst drubbing in a month the day before.

Technology stocks, which have powered much of this year’s gains, were up marginally. Covid-19 vaccine developers like Inovio Pharmaceuticals, Pfizer, BioNTech and Johnson & Johnson and Moderna were mixed after approval of AstraZeneca’s Covid-19 shot.

Trading is expected to remain light in the holiday-shortened week, which could boost volatility in the market.

(Additional reporting: Bloomberg/Reuters)