European stocks mostly higher with U.S. stimulus, virus in focus

  • Treasury Secretary Steven Mnuchin on Thursday announced plans to allow several of the Federal Reserve's emergency lending programs to expire on Dec. 31, reducing the central bank's ability to shore up the financial system.

LONDON — European stocks inched cautiously higher on Friday morning as investors monitored spiraling coronavirus cases around the world and conflicting prospects for U.S. fiscal and monetary stimulus.

The pan-European Stoxx 600 gained 0.2% in early trade, with retail stocks adding 0.8% as most sectors and major bourses entered positive territory.

Treasury Secretary Steven Mnuchin on Thursday announced plans to allow several of the Federal Reserve's emergency lending programs to expire on Dec. 31, reducing the central bank's ability to shore up the financial system.

However, Senate Majority Leader Mitch McConnell, R-Ky., has agreed to resume negotiations with congressional Democrats over a long-awaited federal Covid-19 relief bill, Sen. Chuck Schumer, D-N.Y., revealed Thursday.

U.S. stock futures pointed sharply lower in the early hours of Friday morning, with Dow futures dropping around 190 points while S&P and Nasdaq futures edged fractionally lower.

Markets in Asia-Pacific were mixed overnight as concern over the global resurgence of the coronavirus pandemic and fears of associated economic shutdowns kept investors wary.

Global markets had been receiving a boost up until Wednesday after Pfizer and Moderna announced successful coronavirus vaccine trials, with the pan-European Stoxx 600 notching an 8-month high and Wall Street surging to records. However, the rally has petered out as widespread spikes in virus cases, particularly in the U.S. and Europe, cause policymakers to consider fresh lockdown measures.

Back in Europe, direct Brexit talks have been suspended after a member of the EU team tested positive for Covid-19 on Thursday, but chief negotiators and their respective teams have continued discussions remotely in the hope of thrashing out a deal within the next 10 days.

On the data front, flash consumer confidence readings out of the euro zone are due at 3 p.m. London time.

In terms of individual share price moves, shares of Sage Group plunged more than 10% in early trade as the British software company's profit dipped following a cloud investment.

At the top of the European blue chip index, CTS Eventim shares added 3%.

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