European stock markets open week in the red with covid-19 and fiscal stalemate in the US

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The truce in the European markets on Friday (23) was short-lived, with the risk aversion movement setting the tone at the stock exchanges earlier in the week, aligned with the futures in New York, also in “downhill mode”. Pessimism returned in the face of growing concern about the increase in cases of covid-19 in the Old Continent, and also in the United States, apart from the fiscal stalemate there, with investors less confident, each day, that a new package comes out of the elections, next week.

At 6:55 am, Stoxx-600, which represents 90% of European shares, was down 0.62% to 360.24 points. After renewing the low level of last month, the pan-European index slowed the downward movement.

“A combination of stability in covid-19 mortality rates, concerns about national lockdowns and the expectation of more government support is keeping markets down one level,” says London Capital Group (LCG) head of research, Jasper Lawler.

The resurgence of covid-19 cases in Europe remains at the top of investor tensions – and also of the World Health Organization (WHO). Spain declared a second state of national emergency on Sunday, imposing a curfew across the country. In France, with more than one million infected, mayors in the Southeast asked the authorities to build a field hospital. Italy has also imposed new measures to contain the virus.

The situation of the pandemic in the United States raises the cordon of concerns, which until then weighed more in relation to the lack of definition of a new fiscal package to combat the damage to the economy. There are two consecutive days of about 80,000 new cases while White House chief of staff Mark Meadows said it would not be possible to “control the pandemic”. “We will control the fact that we will get vaccines and treatments,” he said.

Over the course of this morning, markets in Europe slowed down amid news that the vaccine developed by Oxford University with AstraZeneca generates a similar immune response in older adults and also in younger ones, according to a spokesman. of the pharmaceutical company. According to the Reuters, adverse reactions were lower among the elderly.

On the corporate front, the shares of the German SAP pull the technology segment down. The company cut its projections of future revenues, saying the pandemic will continue to weigh on its business, and saw its shares plummet by more than 18%.

As for the week’s agenda, on the investors’ radar is the European Central Bank (ECB) monetary policy decision, on Thursday (29). With the increase in cases of covid-19 and the announcement of stronger measures to contain it, the pressure on the ECB to “do more – and sooner” increased, in the view of the Dutch Rabobank.

Fear over the spread of the disease on the Old Continent is growing, with investors already fearing the arrival of winter in the Northern Hemisphere, which begins in December. Europe left daylight saving time on Sunday, delaying its clocks by an hour. As of this Monday, European stock exchanges will operate from 5 am to 1:30 pm (Brasília time).

Also at 6:55 am, in Frankfurt, the DAX led the movement of losses, down 2.19%. In addition to the fall in SAP’s shares, the corporate sector’s confidence index in Germany fell more than expected, from 93.2 points in September to 92.7 points in October. In London, the FTSE-100 index fell by 0.21%, while in Paris, the CAC-40 fell by 0.57%, and the FTSE-MIB, in Milan, declined by 0.88%. In Madrid, the IBEX-35 was down 0.25% and the PSI-20, in Lisbon, was down 0.92%.

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