Elliot Smith, Holly Ellyatt
LONDON — European stocks erased early gains on Monday to close lower as lingering coronavirus concerns offset resurfaced hopes of a U.S. stimulus deal in the coming weeks.
The pan-European Stoxx 600 closed down by almost 0.2% provisionally, having been up by as much as 0.8% earlier in the session. The chemicals sector dipped 0.9% to lead the losses while financial services shares gained 1%.
Global markets were bolstered at the start of trading after U.S. House Speaker Nancy Pelosi said Sunday that although differences remain between congressional Democrats and White House negotiators, she was optimistic about pushing through legislation on a fiscal stimulus deal before the Nov. 3 election.
However, concerns about the coronavirus spread and state of Brexit trade talks continue to keep a lid on gains. A second wave of coronavirus cases in Europe remains a key focus for markets in the region, as well as Brexit after discussions between the EU and U.K. appeared to come to an end last week with both sides telling the other to compromise.
Prime Minister Boris Johnson said last week that talks were “over” and the UK should “get ready” to trade with the EU from Jan. 1 without a trade deal in place. In signs there could be some room to maneuver still, trade talks will continue on Monday but not in person, as previously planned.
In coronavirus news, Italy’s prime minister announced more measures to curb a second wave of infections Sunday, including restricted opening times for restaurants and limits on public gatherings. The move comes after more than 11,000 new cases were reported on Sunday.
On Wall Street, stocks slipped as investors hoped for a stimulus deal from Washington, however the rising number of Covid-19 cases dampened sentiment.
China’s third-quarter GDP grew 4.9% as compared to a year ago, according to data released Monday by the country’s National Bureau of Statistics. That compared against expectations by Chinese economists of 5.2% GDP growth in the third quarter, according to an average of estimates compiled by Wind Information, a financial information database.
Stocks on the move
In terms of individual share price action, IWG climbed almost 5% after Berenberg upgraded the office space provider’s stock to “buy” and raised its price target. Swiss wealth manager Julius Baer gained 6% following an upbeat third-quarter earnings report.
At the bottom of the European blue chip index, Saab shares dropped more than 14% after the Swedish carmaker posted a disappointing set of third-quarter results.
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