London stocks’ downfall blamed on EU’s failure to agree on coronavirus recovery plan
The index had already fallen 65 points to 5,638 within its first half hour of trading today, following two consecutive days of significant gains
London’s blue-chip index could not make up a 1.2 percent slump after talks between EU finance bosses over how to fight the coronavirus crisis together collapsed once again. The index had already fallen 65 points to 5,638 within its first half hour of trading today – following two consecutive days of significant gains.
Markets have reacted badly to the failure of EU finance chiefs to agree on a coronavirus rescue package. They were involved in a marathon 16-hour teleconference but could not agree on how to help European economies recover from the deeply damaging pandemic.
France and some of Europe’s other worst-hit southern countries have clashed with the likes of Germany over whether to issue joint debt in the form of coronabonds.
Angela Merkel’s government in particular has shown strong opposition towards this proposal.
Josh Mahony, senior analyst with online trader IG, said: Overnight squabbles saw finance ministers ultimately fail in their bid to introduce an aid package worth half-a-trillion euros. This is just the latest in a list of worrying events which highlight the feeling of dissatisfaction over the EU’s coronavirus response.
The squabbles seen last night were a clear reminder of just how difficult it can be to find agreement between 27 nations who have all seen vastly different experiences in recent weeks. Until a resolution on this package is found, we could see stock markets continue to struggle, he said.
Connor Campbell, financial analyst at trading platform Spreadex, said: Their confidence knocked by the EU’s inability to reach a consensus regarding its response to the coronavirus crisis, the European indices remained in the red on Wednesday.
Maintaining a 50 point fall, the FTSE continued to sit just under 5650, weighed down by notable losses for BP (-3.2%), Glencore (-4.2%), and Tesco (-4.5%), the latter of which warned investors that the cost of the Covid-19 crisis could run as high as £950 million, he said.