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Modest gains for European markets amid lockdown concerns

COVID-19

The pan-European STOXX 600 was up 0.7%, DAX gained 0.7%, CAC 40 rose by 0.5%, and FTSE 100 gained 0.4%

There were modest gains in European markets as governments are putting forward more stringent rules around COVID-19.

The pan-European STOXX 600 gained 0.7%. Germany’s DAX rose by 0.7%, and France’s CAC 40 was up 0.5%.

London’s FTSE 100 was up 0.4% in early trading, a marked improvement after being the worst hit blue chip index in Europe on Monday.

European markets began the week with a rough start, with their worst one-day performance since June on Monday, following looming fears of a second lockdown as COVID-19 cases rise again. Rather than focusing on getting economies back into full swing, governments must now consider reimposing restrictions on social interactions.

Sadly, as a result of recent events and the shambolic response to the virus, as well as the mixed signals coming from government, a lot of political capital and trust that was evident in the early part of the pandemic, has been used up, to the extent that people are starting to doubt a lot of what they are being told, said Michael Hewson, chief market analyst at CMC Markets.

Key European data announced on Tuesday includes the Euro area’s advance consumer confidence reading for September. Riksbank will be announcing their latest decision on interest rates. The German IFO Institute for Economic Research will also release its forecast for the remainder of the year.

Meanwhile, UK’s Cabinet Office minister Michael Gove told Sky News on Tuesday morning there will be a “shift in emphasis” in the government’s working from home advice.

UK prime minister Boris Johnson will be chairing an emergency COBRA committee meeting later on Tuesday and is expected to outline the latest COVID-19 restrictions to parliament, after he raised the COVID-19 threat level to 4 from 3. This could include an announcement that people should work from home again and a 10pm curfew on pubs and restaurants.

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