Stock rally pauses with European markets sluggish

Euro pared a decline after the ECB added to its stimulus package

Photograph: iStock

Photograph: iStock


The stock rally that’s been fed by bets on a speedy economic recovery from the pandemic paused for breath on Thursday as US futures struggled alongside equities in Europe. The euro pared a decline after the ECB added to its already massive stimulus package.

Contracts on the S&P 500 and Nasdaq 100 gauges fell, a day after the tech-heavy index traded briefly above its record-high close. The Stoxx 600 dipped though it pared losses from earlier in the session. Stocks in Asia were mixed, with an MSCI benchmark of global equities falling just short of recouping three-quarters of its tumble from a February record.

The euro erased a loss in the wake of the European Central Bank decision, in which policy makers added €600 billion to their pandemic purchase programme and extended it to at least June 2021. Italian bonds climbed. Treasuries were steady.

After exceptional gains for equities in the past week, investors are digesting the latest decision from Frankfurt while keeping an eye on US employment data that may signal the extent of the damage to jobs. Traders are searching for further tailwinds for risk assets without more evidence that reopening economies can trigger a rebound in corporate earnings.

“We’ve had an over-extension, and a bit of altitude sickness is creeping in,” said Neil Wilson, chief market analyst in London for

Earlier on the stimulus front, German chancellor Angela Merkel’s coalition agreed on a sweeping €130 billion package designed to spur short-term consumer spending and get businesses investing again.

Elsewhere, West Texas oil declined from a three-month high as OPEC+ unity was threatened by a long-running feud and US data cast doubt on the strength of the demand recovery. – Bloomberg