Cryptocurrency News

European shares fall after U.S. Fed’s grim view on recovery

imageStock Markets3 hours ago (Aug 20, 2020 04:50AM ET)


(C) Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt


By Sruthi Shankar

(Reuters) – European stocks were hit by a wave of selling in global equity markets on Thursday after the U.S. Federal Reserve signalled a long and difficult path of recovery for the world’s largest economy.

The pan-European STOXX 600 index (STOXX) fell 1%, led by miners (SXPP) due to weaker metal prices. Other economically sensitive sectors such as banks (SX7P) and automakers (SXAP) and oil and gas (SXEP) dropped between 1.2% and 2%.

The Fed minutes showed that policymakers were doubtful of a quick economic rebound and suggested stimulus measures for a longer period, pushing the Wall Street indexes off their all-time highs on Wednesday.

“The change in mood has been clearly down to the release of the minutes which reminded investors that the economy is still not in good shape,” said Hussein Sayed, chief market strategist at FXTM.

The minutes also disappointed some investors who were expecting the Fed to discuss capping government bond yields as part of a broader policy review.

“That the Fed appeared reluctant to step up further stimulus efforts imminently, disappointed the bulls who were expecting further clues on the trajectory of monetary policy.”

A full bounceback from the euro zone’s deepest recession on record will take two years or more, a Reuters poll showed, with economists saying there is a high risk of the job recovery reversing by the end of 2020.

Worries over rising coronavirus cases in Europe also kept investors on edge. Norway said it will impose a 10-day quarantine on all people arriving from Britain, Austria, Greece and Ireland from Aug. 22.

Among individual stocks, Chilean miner Antofagasta (L:ANTO) fell 3.8% after it posted a 22.4% plunge in first-half core earnings on lower copper sales, but said it would pay an interim dividend.

Swedish private equity firm EQT (ST:EQTAB) slumped 10.6% as it said the pandemic led to fewer investments for the company this year and sharply slower pace of exits.

Intercontinental Hotels Group (L:IHG) rose 0.4% and France’s Accor (PA:ACCP) gained 2.5% after a French newspaper reported the hotel operators examined a merger.

German real estate firm Tag Immobilien (DE:TEGG) jumped 4.1% as it confirmed its guidance for 2020 and said raising it during the year was a possibility.

European shares fall after U.S. Fed’s grim view on recovery

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Back to top button
Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!