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European markets tad lower as investors react to economic data, virus treatment hopes

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European markets traded slightly lower as investors reacted to news of a potentially effective coronavirus treatment while monitoring corporate earnings and economic data

European markets traded slightly lower Thursday afternoon as investors reacted to news of a potentially effective coronavirus treatment while monitoring corporate earnings and economic data.

The pan-European Stoxx 600 quickly gave up early gains to slide 0.3% noon. Banks fell 2.1% to lead losses while tech stocks climbed 0.7%.

Despite the slight fall Thursday, the European benchmark is still on course to close out its best month since July 2009, rebounding from March’s historic sell-off as the coronavirus pandemic began to spread throughout the world.

Euro zone GDP contracted by a record 3.8% in the first quarter, compared to the last three months of 2019, official figures showed on Thursday, as lockdowns resulting from the coronavirus pandemic ravage the 19-member bloc’s economy.

France entered a technical recession with a contraction of 5.8% in the first three months of the year, the sharpest decline for Europe’s second-largest economy since records began in 1949.

Markets are also awaiting the latest monetary policy decision from the European Central Bank, due at 12:45 p.m. London time.

Investors in Europe are also reacting to news from the U.S. regarding the use of Gilead Sciences’ antiviral drug remdesivir as a potential new treatment for Covid-19 patients.

Gilead Sciences said Wednesday preliminary results of a coronavirus drug trial showed at least 50% of patients treated with a five-day dosage of remdesivir improved and more than half were discharged from the hospital within two weeks.

Later Wednesday, White House health advisor Dr. Anthony Fauci said NIAID’s remdesivir drug trial, which enrolled about 800 patients, showed “quite good news” and that the drug would set a new standard of care for Covid-19 patients.

Corporate earnings remain a key driver of individual share price action.

Royal Dutch Shell on Thursday morning cut its dividend to shareholders for the first time since World War II, following a plunge in oil prices as the coronavirus pandemic ravages demand. The oil giant reported first-quarter net income attributable to shareholders of $2.9 billion, a 46% decline from the same period last year. Shares pared earlier losses to trade 5% lower.

Carlsberg reported a 7% decline in first-quarter sales and warned that the worst is yet to come, as increased supermarket sales failed to offset the closure of bars and restaurants for the world’s third-largest brewer. Carlsberg shares added 0.4%.

Nokia swung to profit in the first quarter on the back of continuing momentum in 5G deals. The Finnish telecoms provider saw its stock climb 3.1%.

At the top of the European blue chip index, BE Semiconductor shares jumped more than 7%.

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