European stock markets fell sharply on Thursday due to investor fears of a growing case of Covid-19, which is stifling economic activity, and also because hopes of a US economic stimulus are dying as the election approaches.
Concerns that the return of the Covid-19 pandemic could lead governments across Europe to close their economies have affected investor confidence, especially after the recent rise in stocks.
The new cases in Europe reach 100,000 infected per day. Nearly 20,000 infections were reported in the UK, while the French government declared a public health emergency on Wednesday. Hospital admissions are also now clearly showing an upward trend, although deaths are still well below spring peaks.
Germany, France, the United Kingdom and others are in the process of implementing measures such as limited lockdown, bar closures and other systems designed to reduce the spread of infection.
Beyond the Atlantic, the chances of further US stimulus ahead of the early November elections appear to have disappeared.
Also worrying are concerns that the EU and Britain – the world’s largest trading bloc and the world’s sixth largest economy – will try to come up with a trade agreement before the end of the year.
European Union leaders are due to meet in Brussels on Thursday to discuss progress on difficult fisheries, competition and dispute resolution issues.
Oil prices fell slightly on Thursday and eased slightly despite higher-than-expected US oil supplies due to concerns about a growing number of coronavirus cases and the impact this could have on demand.
An industry group of the American Petroleum Institute said that oil reserves in the US fell by 5.4 million in the week to October 9, which is almost double the expectations of analysts.
US crude futures traded 0.6% lower at $ 40.80 per barrel, while Brent’s international benchmark contract fell 0.6% to $ 43.06.
Gold futures stagnated at USD 1,907.50/oz, while the EUR/USD currency pair traded 0.1% lower at 1.1740.