European Stocks Seen Lower, Covid-19 and Brexit Concerns Weigh

European stock markets are seen opening lower Thursday, with investors fretting about resurgent Covid-19 infections as well as troubled Brexit talks.

At 2 AM ET , the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.7% and the FTSE 100 futures contract in the U.K. fell 0.6%.

Concerns that a resurgence in the Covid-19 pandemic could lead governments throughout Europe to shut down their economies again has hit the confidence of investors, particularly after the recent stock rally.

New cases are hitting 100,000 daily in Europe. Nearly 20,000 infections were reported in Britain, while the French government on Wednesday declared a public health state of emergency.

Germany, France, the U.K., and others are in the process of instituting measures such as limited lockdowns, bar closures and other systems intended to reduce the spread of infection.

This is occurring while doubts are emerging over the speed at which vaccines will be approved. Despite the global push for a Covid-19 vaccine, with dozens in clinical trials and hopes for initial inoculations this year, WHO Chief Scientist Soumya Swaminathan reiterated Wednesday that mass shots were unlikely to be widely available in the near future.

At the same time, businesses and markets within Europe are becoming increasingly jittery about uncertain trading rules between the world’s largest trading bloc and the sixth-biggest economy as the year-end deadline to put a post-Brexit deal in place nears.

European Union leaders are set to meet in Brussels later Thursday to discuss progress, amid few signs of compromise on the tricky issues of fisheries, fair competition and dispute resolution.

In corporate news, Swiss pharmaceutical major Roche said Thursday that sales fell in the period from January to September compared with the previous year, but it backed its outlook for 2020.

Advertising giant Publicis said its organic revenue fell 5.6% in the third quarter compared with the prior year, but this still represents an improvement from the 13% drop in the second quarter.

Oil prices edged lower Thursday, retreating slightly despite a larger-than-expected draw in U.S. crude supply amid worries about the rising number of coronavirus cases and the impact this could have on demand.

The American Petroleum Institute industry group said U.S. crude stockpiles fell by 5.4 million in the week to Oct. 9, nearly double analysts’ expectations.

The U.S. Energy Information Administration is due to release its weekly data on Thursday, a day later than normal following a public holiday. Also of interest will be the meeting of the Organization of the Petroleum Exporting Countries’ joint technical committee meeting later in the day, to discuss the group’s production levels.

U.S. crude futures traded 0.2% lower at $40.95 a barrel, while the international benchmark Brent contract fell 0.2% to $43.322.

Elsewhere, gold futures fell 0.4% to $1,900.50/oz, while EUR/USD traded 0.1% higher at 1.1755.

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