European stocks sink despite hopes of US stimulus deal this week

Tom Belger
·Finance and policy reporter
·2-min read
A city worker walks through the City of London with St. Andrew Undershaft church
The City of London. Photo: Toby Melville/Reuters

European stocks slid on Wednesday, with concerns over new coronavirus curbs offsetting hopes of a US stimulus deal this week.

Several indices in Asia rose overnight and Wall Street opened higher, amid hopes of a breakthrough in talks over a stimulus package in the US.

House of Representatives Speaker Nancy Pelosi said after talks with Treasury secretary Steven Mnuchin late on Tuesday she hoped an agreement could be reached by the end of this week.

The S&P 500 (^GSPC) rose 0.3%, the Dow (^DJI) rose 0.1% and the Nasdaq (^IXIC) rose 0.5% on the open in the US, following gains on. Tuesday.

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Stimulus hopes had also helped lift Japan’s Nikkei (^N225) 0.3%, and the Hong Kong Hang Seng (^HSI) 1.1% overnight, as well as most Asian stocks outside China.

The gains failed to lift European markets, however, with stocks opening near-flat but quickly falling. Britain’s FTSE 100 (^FTSE) had shed 1.4% by mid-afternoon as a rising pound on Brexit developments hurt export-focused stocks, and new lockdown curbs were announced in Greater Manchester and South Yorkshire.

Germany’s DAX (^GDAXI) lost 1%, and France’s CAC 40 (^FCHI) lost 1.1%. Several European countries are weighing up or imposing further restrictions, which would likely hobble economies further. The Spanish government is considering tighter rules in badly affected areas like Madrid.

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China’s stocks also saw declines. The Shanghai Composite (000001.SS) lost 0.1% and the Shenzhen Component (399001.SZ) lost 1%.

WATCH: European markets slide on coronavirus restrictions