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European stock markets lower amid virus concerns

European stock

FTSE 100 fell 0.5%, while DAX shed 0.4% and CAC 40 lost 0.3%

European stock markets opened lower on Wednesday, as concern over coronavirus rates and restrictions outweighed vaccine hopes.

Investors are starting “to focus more on the near term issues of the economic damage caused by extended lockdowns and restrictions, rather than the prospect of a vaccine that still remains some weeks away,” said Michael Hewson, chief market analyst at CMC Markets UK.

Britain’s FTSE 100 dropped 0.5% at the open, while Germany’s DAX lost 0.4% and France’s CAC 40 dropped 0.3%.

Travel and leisure stocks took a particular hit from renewed worries about the impact of COVID-19 curbs on firms’ ability to trade over the winter, paring back gains since Pfizer’s and Moderna’s promising vaccine announcements.

A UK government medical adviser said on Tuesday that England may need stricter regional restrictions once its current lockdown ends in December. Meanwhile Germany is considering tightening restrictions. France’s health minister has also warned against any “let up [of[ our efforts too early.”

Virus concerns also weighed on the mood in the US on top of weaker-than-expected economic data, with the three main indices closing lower on Tuesday and futures slightly down on Wednesday. Infections recorded in a day surpassed 160,000 for the first time, in a grim milestone, while consumer spending data was the lowest since April.

S&P 500 and Dow Jones Industrial Average futures were trading 0.3% lower as markets opened in Europe, while the Nasdaq was off 0.1%.

With cases of coronavirus continuing to rise sharply in the US, and various states locking down in the face of colder weather, and rising cases, it is now becoming much more obvious that the next two months are likely to be even worse for US businesses, particularly since another fiscal stimulus plan still seems quite some way off, added Hewson.

In Asia, Nikkei also lost 1.1% overnight after new infections hit a record high in Tokyo.

But a better short-term outlook on infection levels boosted stocks on other leading Asian indices. Hong Kong’s Hang Seng closed 0.4% higher, while the Shanghai Composite gained 0.2%.

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